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UBS Securities Asia Limited Announces CBBC Issue

Strategic Insights

— 2 min read

Hong Kong-based UBS Securities Asia Limited has recently issued several announcements regarding the upcoming Chinese Banking Bond Connect (CBBC) issues. The CBBCs will be used for various purposes, including funding and gearing.

The announcements outline five separate CBBC issues, each with a unique set of terms and conditions. The issues are for Alibaba Group Holding Limited, NetEase, Inc., HSBC Holdings plc, Geely Automobile Holdings Limited, and Geely Automobile Holdings Limited. The issue prices for each series range from HKD 0.250 to HKD 0.250, with a funding cost per CBBC ranging from HKD 0.1000 to HKD 0.2270. The strike prices for each series range from HKD 245.000 to HKD 45.000, and the cash settlement amounts per board lot will be calculated based on the closing price of the relevant share.

Key Takeaways:

  • Five separate CBBC issues have been announced by UBS Securities Asia Limited for different companies: Alibaba Group Holding Limited, NetEase, Inc., HSBC Holdings plc, Geely Automobile Holdings Limited, and Geely Automobile Holdings Limited.
  • The issue sizes range from 80 million to 100 million CBBCs.
  • The funding costs for each series range from HKD 0.1000 to HKD 0.2270.
  • The strike prices for each series range from HKD 245.000 to HKD 45.000.
  • The cash settlement amounts per board lot will be calculated based on the closing price of the relevant share.
  • The gearing and premium for each series range from 1.66x to 10.40x and 37.40% to 51.81% respectively.
  • The maximum number of shares that the CBBCs relate to ranges from 800,000 Shares to 2,000,000 Shares.
  • The issue dates are February 1, 2021, and the listing dates are February 2, 2021.

Statistics:

  • Issue Size: 80,000,000 CBBCs for Series 68711, 80,000,000 CBBCs for Series 68720, 100,000,000 CBBCs for Series 68870, 100,000,000 CBBCs for Series 68874, 100,000,000 CBBCs for Series 68961.
  • Funding Cost: HKD 0.1000 for Series 68711, HKD 0.1730 for Series 68720, HKD 0.2150 for Series 68870, HKD 0.2330 for Series 68874, HKD 0.2270 for Series 68961.
  • Strike Price: HKD 245.000 for Series 68711, HKD 180.200 for Series 68720, HKD 45.000 for Series 68870, HKD 29.500 for Series 68874, HKD 31.500 for Series 68961.
  • Gearing: 10.40x for Series 68711, 7.52x for Series 68720, 1.66x for Series 68870, 2.43x for Series 68874, 2.43x for Series 68961.
  • Premium: 3.85% for Series 68711, 9.21% for Series 68720, 51.81% for Series 68870, 38.39% for Series 68874, 37.40% for Series 68961.

Sources:

  • UBS Securities Asia Limited Announcement (2021) [1]
  • Hong Kong Exchanges and Clearing Limited [2]

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