After a couple of lean years, convertible bonds (CBs) are enjoying a renaissance in Asia.
On Tuesday (June 4), the Chinese online travel agency Trip.com completed a $1.3 billion sale of convertible senior notes due 2029 to pay down debt and boost its capital reserves.
Two weeks earlier another big mainland digital firm, Alibaba, issued $5 billion in convertible bonds, marking a record dollar-denominated sale by an Asian corporate.
It is a timely return to form for an asset class whose fortunes have always tended to wax and wane. This year is a case in point.
The first four months were comparatively quiet, with $6.48 billion raised across 25 Asia Pacific sales, according to Dealogic.
Then it sprang sharply to life. Alibaba’s blockbuster trade and a $2 billion sale of five-year CBs by Beijing-based e-commerce firm JD.com, completed two days apart, helped make May the strongest single month for the asset class in Asia Pacific in three years, with $7.33 billion raised via five sales, Dealogic data shows.
It is also worth noting that a number of 2024’s biggest deals have been far from straightforward.
Leap in the dark
Quite apart from its size and international reach – it was six times oversubscribed and won orders from around 250 investors, including a strong buy-in from US funds – the Alibaba offering was notable in other ways.
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