Jul 17, 2024 01:56 AM
BUSINESS
Ping An Unveils $3.5 Billion Convertible Bond Issuance to Fuel Future Growth
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The headquarters of Ping An Insurance Group in Shanghai.
Ping An Insurance Group Co. of China Ltd. announced plans Tuesday to issue $3.5 billion of convertible bonds to replenish its capital and support new business initiatives.
The five-year bond’s coupon was set at 0.875% a year, and its conversion price at HK$43.71 a share, a 21.25% premium over its Hong Kong-listed shares’ closing price of HK$36.05 on Monday, the insurance giant said in a regulatory filing.
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- Ping An Insurance plans to issue $3.5 billion of convertible bonds with a 0.875% coupon rate and a 21.25% premium conversion price.
- Proceeds will fund business development in finance, healthcare, and elderly care, unlike recent JD.com and Alibaba bonds for stock buybacks.
- The issuance could boost the solvency ratio by 3.1 percentage points, helping to stabilize dividends despite low interest rates.
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Who’s Who
- Ping An Insurance Group Co. of China Ltd.
- Ping An Insurance Group Co. of China Ltd. plans to issue $3.5 billion of convertible bonds to enhance capital and support new business initiatives in finance, healthcare, and elderly care. The five-year bonds have a 0.875% coupon and a conversion price at a 21.25% premium over its previous closing price. The issuance will increase bondholders' stake to 3.32% upon full conversion. The move aims to stabilize and boost long-term dividends despite persistent low interest rates.
- JD.com Inc.
- JD.com Inc. recently issued convertible bonds aimed at buying back stock, unlike Ping An Insurance Group, which plans to use proceeds for business development.
- Alibaba Group Holding Ltd.
- Alibaba Group Holding Ltd. recently issued convertible bonds aimed at buying back stock, differing from Ping An Insurance's approach of using the proceeds to fund future business initiatives.
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What Happened When
- Monday, July 15, 2024：
- Ping An Insurance Group Co. of China Ltd.'s Hong Kong-listed shares closed at HK$36.05.
- Tuesday, July 16, 2024：
- Ping An Insurance Group Co. of China Ltd. announced plans to issue $3.5 billion of convertible bonds.
- Tuesday, July 16, 2024：
- Ping An’s A shares and H shares fell by 3.15% and 5.41%, respectively.
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