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New York Registered Chinese Companies Are Drawing Bond to Amplify Capitals Rapidly

Chinese corporations registered in New York are increasingly drawing convertible bonds and different financial mechanisms to raise capital quickly.

It’s a sign of the companies’ demand for financing, and of the market’s rising confidence in the companies, analysts mentioned.

On Wednesday Shenzhen-based LexinFintech introduced it entered into an agreement with Asian private equity large PAG for the sale of $300 million of seven-year convertible notes, which could be exchanged for stock at $14 a share as early as six months after issuance.

Convertible bonds are debt that may be converted right into a specified variety of shares, whereas offering the profits of a bond, such as interest payments.

LexinFintech, which operates an installment purchase e-commerce website and a shopper loan platform, closed more than 5% higher Thursday at $11.79 a share.

The information follows a Sept. 5 announcement from Chinese electric car firm Nio that it agreed to the issuance of $200 in exchangeable notes — split between an affiliate of tech big Tencent and Nio’s Chairman and CEO William Li. In January, Nio had already issued $650 million in convertible notes.

Video-streaming websites Bilibili, iQiyi, and YY are simply some of the other U.S.-listed Chinese firms which have entered into similar financing agreements this year.

Within the roughly first nine months of the year, Chinese corporations have introduced practically $7.2 billion in public choices of fixed revenue and private placements, typically of convertible debt, based on CNBC evaluation of data from S&P Global Market Intelligence. That outpaced $5.6 billion raised within the first three quarters of 2018, and is near last year’s total of $7.8 billion, the data showed.

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