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.