On Nov 23, Link REIT announced it raised HK$3.3 billion via the issuance of five-year convertible bonds due 2027, with a coupon rate of 4.5% p.a. The bonds are convertible into Link’s new units at an initial conversion price of HK$61.92 per unit (subject to adjustments), which represents a conversion premium of 16.5% above the closing price of Link REIT on Nov 22, and 17.2% above the price of Link REIT as at Nov 24.
Assuming there is no other change in Link’s existing unitholding and full conversion of the Bonds at the initial conversion price of HK$61.92 per unit, a maximum of 53,294,573 new units will be issued, representing approximately 2.5% of the number of units in issue as enlarged by the issue of the new units.
The CBs will replenish funding sources in light of the maturing facilities and increase the portion of fixed-rate debt in spite of interest rate hikes.
“We are pleased to receive strong responses from global investors toward our issuance, demonstrating their confidence in Link’s long-term growth prospects. The issuance of convertible bonds enables us to replenish our funding at a lower cost and give us additional financial resources and liquidity for operational needs and business development," said George Honchoy, CEO of Link REIT.
