DUBAI: DP World plans to raise $1bn with a convertible bond issue of 10 years duration to fund growth opportunities and diversify its funding sources, the Dubai-based ports operator said in a statement yesterday.
The issue is a rare example of an international convertible bond from a Middle Eastern issuer, but comes at a time of spiking convertible issuance among European corporates.
DP World’s debut convertible issue is expected to pay a coupon in a range of 1.5 to 2 percent, and will have a conversion premium between 35 and 40 percent above the reference share price, the bourse filing said.
The reference price will be set according to the volume-weighted average price between the start and close of trading of DP World shares yesterday. At 0730 GMT, the shares were trading down 3.75 percent at $19.25.
The company can buy back the bonds after three years, should the DP World share price be 30 percent above the value of the reference share price or if more than 85 percent of the bonds have been converted by investors. Investors can have the company buy back the bonds at years four and seven.
The deal, aimed at institutional investors, priced yesterday, the company said.
The last major convertible bond sold by a Gulf company was in May 2013 when National Bank of Abu Dhabi completed a $465m, five-year convertible that was later raised to $500m.
Reuters
