Credit Suisse Issues Series of Cash-Settled Bear and Bull CBBCs for Xiaomi, Meituan Dianping, and Tencent Holdings

Strategic Insights -

Credit Suisse (Hong Kong) Limited has issued a series of cash-settled bear and bull CBBCs (Constant Buying Bidding Currency) for three leading technology companies in Hong Kong: Xiaomi Corporation, Meituan Dianping, and Tencent Holdings Limited. The CBBCs are designed to provide investors with an additional tool for hedging and speculation, allowing them to cash in on potential price movements in the underlying shares.

Key Takeaways:

  • The CBBCs have a total issue size of 150 million units, with 50 million units allocated to each of the three companies.
  • The funding cost per CBBC is HK$0.1848 for Xiaomi, HK$0.2336 for Meituan Dianping, and HK$0.1108 for Tencent Holdings Limited.
  • The strike prices for the CBBCs are HK$230.88 for Xiaomi, HK$20.98 for Meituan Dianping, and HK$511.08 for Tencent Holdings Limited.
  • The maximum number of shares that the CBBCs relate to is 2 million shares for Xiaomi, 5 million shares for Meituan Dianping, and 1 million shares for Tencent Holdings Limited.
  • The launch date for all series of CBBCs is September 18, 2020, with the issue date set for September 22, 2020.
  • The listing date for all series of CBBCs is September 23, 2020, with the observation commencement date also on September 23, 2020.
  • The valuation date for all series of CBBCs is the trading day immediately preceding the expiry date.
  • The expiry dates for the CBBCs are January 28, 2021, (Xiaomi), May 28, 2021, (Meituan Dianping), and February 25, 2021, (Tencent Holdings Limited).

Statistics:

  • Total issue size: 150 million CBBCs
  • Funding cost per CBBC:

+ Xiaomi: HK$0.1848

+ Meituan Dianping: HK$0.2336

+ Tencent Holdings Limited: HK$0.1108

  • Strike prices:

+ Xiaomi: HK$230.88

+ Meituan Dianping: HK$20.98

+ Tencent Holdings Limited: HK$511.08

  • Maximum number of shares:

+ Xiaomi: 2 million shares

+ Meituan Dianping: 5 million shares

+ Tencent Holdings Limited: 1 million shares

  • Launch date: September 18, 2020
  • Issue date: September 22, 2020
  • Listing date: September 23, 2020
  • Observation commencement date: September 23, 2020
  • Valuation date: Trading day immediately preceding the expiry date
  • Expiry dates:

+ Xiaomi: January 28, 2021

+ Meituan Dianping: May 28, 2021

+ Tencent Holdings Limited: February 25, 2021

  • Settlement date: Third CCASS Settlement Day after the end of the MCE Valuation Period or the later of the expiry date and the day on which the closing price is determined

Sources:

  • https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0921/2020092101018.pdf