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The Bank of East Asia, Limited Issues CBBCs (Covered Bond-like Bull and Bear Certificates) under the European Style Cash Settled Category R

Strategic Insights

— 2 min read

The Bank of East Asia, Limited has announced the issue of CBBCs (Covered Bond-like Bull and Bear Certificates) under the European style cash settled category R. The CBBCs will be issued in four series, with each series targeting a specific stock: Semiconductor Manufacturing International Corporation, AAC Technologies Holdings Inc., and Xiaomi Corporation. The issue size for each series varies, with 60,000,000 CBBCs for the Semiconductor Manufacturing International Corporation series, 40,000,000 CBBCs for the AAC Technologies Holdings Inc. series, 40,000,000 CBBCs for the Xiaomi Corporation series Existing Ordinary shares, and 60,000,000 CBBCs for the Xiaomi Corporation series Existing Ordinary Class B shares.

Key Takeaways:

  • The CBBCs will be issued in four series, targeting different stocks: Semiconductor Manufacturing International Corporation, AAC Technologies Holdings Inc., and Xiaomi Corporation.
  • Each series will have a different issue size, with 60,000,000 CBBCs for the Semiconductor Manufacturing International Corporation series and 40,000,000 CBBCs for the other two series.
  • The CBBCs will be classified under the European style cash settled category R.
  • The funding cost per CBBC will fluctuate throughout the life of the CBBCs, but as of the launch date, it was HK$0.1920 for the Semiconductor Manufacturing International Corporation series, HK$0.1710 for the AAC Technologies Holdings Inc. series, HK$0.1300 for the Xiaomi Corporation series Existing Ordinary shares, and HK$0.1000 for the Xiaomi Corporation series Existing Ordinary Class B shares.
  • The strike price for each series is HK$19.60, HK$38.00, HK$11.60, and HK$14.30, respectively.
  • The call price for each series is HK$20.20, HK$41.00, HK$12.00, and HK$13.90, respectively.
  • The cash settlement amount per board lot (if any) payable at expiry will be calculated based on the entitlement, closing price, and strike price for each series.

Statistics:

  • Issue size for the Semiconductor Manufacturing International Corporation series: 60,000,000 CBBCs
  • Issue size for the AAC Technologies Holdings Inc. series: 40,000,000 CBBCs
  • Issue size for the Xiaomi Corporation series Existing Ordinary shares: 40,000,000 CBBCs
  • Issue size for the Xiaomi Corporation series Existing Ordinary Class B shares: 60,000,000 CBBCs
  • Funding cost per CBBC as of launch date for the Semiconductor Manufacturing International Corporation series: HK$0.1920
  • Funding cost per CBBC as of launch date for the AAC Technologies Holdings Inc. series: HK$0.1710
  • Funding cost per CBBC as of launch date for the Xiaomi Corporation series Existing Ordinary shares: HK$0.1300
  • Funding cost per CBBC as of launch date for the Xiaomi Corporation series Existing Ordinary Class B shares: HK$0.1000

Sources:

  • https://www1.hkexnews.hk/listedco/listconews/sehk/2020/0622/2020062200817.pdf

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