China’s JD.com aims to raise US$1.5 billion in convertible bond deal

CHINESE online retailer JD.com is raising US$1.5 billion via a convertible bond sale, according to the company’s regulatory filings on Tuesday (May 21).

The five-year put-three deal was launched after the Hong Kong trading session closed, and ahead of the stock’s open in New York.

The deal is being marketed with a zero to 0.25 per cent coupon paid semi-annually, according to a term sheet seen by Reuters.

Potential investors are being told there is a 35 per cent conversion premium over the reference price of JD.com of HK$132, the stock’s closing price on Tuesday.

At US$1.5 billion, JD.com’s convertible bond is the largest of its kind in Asia so far in 2024, according to Dealogic data.

It is the second largest in the past 17 months after SK Hynix raised US$1.7 billion in a convertible bond in April last year.

There has been US$6.5 billion worth of convertible bond issuance in Asia year to date, down from US$12.7 billion in the same period last year, the data showed.

JD.com plans to use the cash raised to expand its overseas business operations, improve its supply chain network and for potential share repurchases, the term sheet said.

Final pricing on the deal is due before the start of New York trading, according to the term sheet.

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There is a US$225 million greenshoe option attached to the transaction.

JD.com’s Hong Kong share price is up 17.4 per cent in 2024, while the New York listed stock is up 20.4 per cent, according to LSEG data. REUTERS