Link Asset Management Limited (Link), the manager of Link Real Estate Investment Trust (Link REIT), has priced its five-year convertible bonds, raising HK$3.3 billion (US$422 million).

The bonds, due in 2027 with a coupon rate of 4.5% per annum, are convertible into Link’s new units at an initial conversion price of US$61.92 per unit (subject to adjustments), which represents a conversion premium of 16.5% above the closing price of the unit as quoted on the Hong Kong Stock Exchange on November 22 2022. Application will be made for the listing of the bonds and the units to be issued upon conversion of the bonds on the stock exchange.

“We are pleased to receive strong responses from global investors towards our issuance, demonstrating their confidence in Link’s long-term growth prospects,” says Link chief executive officer George Hongchoy. “The issuance of convertible bonds enables us to replenish our funding at a lower cost and gives us additional financial resources and liquidity for operational needs and business development.”

Assuming there is no other change in Link’s existing unitholding and full conversion of the bonds at the initial conversion price, a maximum of 53,294,573 new units will be issued, representing approximately 2.5% of the number of units in issue as enlarged by the issue of the new units.

The proceeds will be used to refinance existing obligations as well as for general corporate purposes. Link last issued convertible bonds in 2019, which raised HK$4 billion – majority of them have been repaid, and only HK$787 million remains outstanding.

HSBC is the sole global coordinator and sole bookrunner for the convertible bond issuance.