Ping An Insurance Seeks $3.5 Billion in Convertible Bonds

Ping An Insurance (Group) Co. is seeking to raise $3.5 billion through the sale of convertible bonds, joining a wave of issuance in Asia in recent months.

The company is offering the bonds due in 2029 with a coupon of 0.375% to 0.875%, according to terms of the deal obtained by Bloomberg News. Concurrent to the convertibles offering, the firm will conduct a share placement aimed at facilitating hedging for investors buying the bonds, the terms showed. The amount, terms and conditions of the proposed convertible dollar bonds have yet to be determined, Ping An said in an exchange filing on Monday, which confirmed a previous Bloomberg News report.

Chinese firms have been turning to convertible bonds to raise funds at cheaper rates than traditional debt given higher borrowing costs. They’ve been particularly popular in the tech sector — Alibaba Group Holding Ltd. sold a record $5 billion convertible bond in May while JD.com Inc. raised $2 billion through the notes.

In May and June alone Chinese companies raised almost $13 billion from convertible bonds, including a $2 billion sale of such notes from Lenovo Group Ltd. to Saudi Arabia’s sovereign wealth fund. The flurry of deals meant the second quarter was the busiest for convertibles since the last three months of 2021, according to data compiled by Bloomberg.

Ping An intends to use proceeds from the offering to further develop the group’s core business and strengthen its capital position to support strategic initiatives in the health-care and elderly-care sectors, and for general corporate purposes, the company said.

Morgan Stanley and JPMorgan Chase & Co. are joint global coordinators.

Photograph: The Ping An International Financial Center in Beijing, China, on Thursday, Nov. 9, 2023. Photo credit: Bloomberg