China Mobile and PCCW assail convertible market

Keen to keep dollar-denominated off its balance sheet, China Mobile has adopted a highly equity-oriented approach to its $600 million deal. PCCW, on the other hand, fighting to reduce its massive debt load and rebuild some credibility with investors, has targeted mainstream convertible accounts with its $1.1 billion offering.

The sudden appearance of the latter on the day the former announced indicative terms, initially left some observers wondering whether overall demand would be cannibalised. However, most agree on reflection that as the two are attempting to attract completely different investor bases, this is unlikely to be the case. Some further argue that China Mobile's deal may even be given an additional push, since its terms now appear far more attractive in the light of PCCW's more aggressive stance.