First-ever green CB globally in the real estate sector printed

This landmark issue also represents Hong Kong’s first benchmark convertible bond by a local issuer in five years and the first in the real estate investment trust sector for 10 years

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Link Asset Management Limited (“Link Asset Management”), as manager of Link Real Estate Investment Trust, has priced its green convertible bonds (“Bonds”) due 2024, raising HK$4 billion at 1.6% per annum, the lowest coupon rate achieved by Asian real estate investment trusts over the past five years.

The green convertible bond issue marks the first-ever green convertible bond globally in the real estate sector and for Hong Kong issuers.

The Bonds, which were allocated to a balanced mix of Asian and European investors, are convertible in the circumstances set out in their terms and conditions into Link’s new units at an initial conversion price of HK$109.39 per unit (subject to adjustments). The Bonds have received an “A” rating from S&P. Application will be made for the listing of the Bonds and the units to be issued upon conversion of the Bonds on the Stock Exchange of Hong Kong.

The proceeds will be used to refinance or fund Link’s existing and future eligible green projects under its green finance framework which has received second opinion by Sustainalytics and the Hong Kong Quality Assurance Agency.

George Hongchoy, chief executive officer of Link Asset Management, says, “The convertible bond issue will help replenish our maturing facilities, diversify our funding sources and expand our investor base. I am pleased that Link has become the first real estate issuer globally and the first Hong Kong issuer to issue a green convertible bond, and that the issue was well received by international investors, particularly global green investors,” he adds.

Assuming there is no other change in Link’s existing unitholding and full conversion of the Bonds at the initial conversion price of HK$109.39 per unit, a maximum of 36,566,414 new units will be issued, representing approximately 1.70% of the number of units in issue as enlarged by the issue of the new units.

HSBC and J.P. Morgan are the joint lead managers for the convertible bond issuance.

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Date

8 Mar 2019

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