Clifford Chance Advises Chow Tai Fook Jewellery on Historic HK$8.8 Billion Convertible Bond Issuance

Strategic Insights -

Clifford Chance, a leading global law firm, has advised Chow Tai Fook Jewellery, a prominent Chinese jeweller, on the issuance and listing of its HK$8.8 billion (US$1.12 billion) 0.375% convertible bonds due 2030 on the Hong Kong Stock Exchange. This landmark transaction featured a unique structure, combining a bond issuance with concurrent stock lending arrangements that enabled investors to hedge their bond positions through covered short selling. The deal was notable for its complexity and the involvement of Clifford Chance's multidisciplinary team, which included partners Mark Chan, Terry Yang, and Virginia Lee.

Key Takeaways:

  • The deal featured a unique structure where stock lending arrangements were implemented to enable investors to hedge their bond positions through covered short selling.
  • The transaction was valued at HK$8.8 billion (US$1.12 billion), making it one of the largest convertible bond issuances in Hong Kong this year.
  • The Clifford Chance team was led by partners Mark Chan, Terry Yang, and Virginia Lee, with support from senior associates and associates.
  • The deal demonstrates the strength and depth of Clifford Chance's team in executing complex equity-linked transactions.
  • Chow Tai Fook Jewellery, a Hong Kong-listed company, is a leading Chinese jeweller and one of the largest jewellers in the world.
  • The transaction builds on Clifford Chance's track record of advising on major debt issuances in Hong Kong, including the HKSAR Government's inaugural issuance under the Infrastructure Bond Programme and HSBC's first-in-market digital bond issuance.

Statistics:

  • The deal was valued at HK$8.8 billion (US$1.12 billion).
  • The bonds have a coupon rate of 0.375%.
  • The bonds are due in 2023, with a 7-year maturity period.
  • The deal included concurrent stock lending arrangements to enable investors to hedge their bond positions.
  • Clifford Chance's team worked closely with Chow Tai Fook Jewellery's management to advise on the deal.
  • This transaction demonstrates Clifford Chance's expertise in executing complex equity-linked transactions.
  • The deal was notable for its use of stock lending arrangements to enable covered short selling.
  • The Clifford Chance team's multidisciplinary approach enabled the successful execution of the deal.

Sources:

  • Clifford Chance press release, June (no date provided)