Acer launches $500 million convertible bond

The deal comes with two tranches and is priced with a zero coupon, making it the first large zero-coupon CB in the world in two years.

Acer Inc, the world’s second-largest computer maker, launched a $500 million two-tranche convertible bond last week which priced with a zero coupon and was re-offered at par. This is the first large zero-coupon CB in the world since 2008, indicating the issuer’s confidence in its profit growth and equity performance in the coming years.

Some analysts expect the CB market to be active between now and the end of 2011 as many Asian corporations with strong company fundamentals move to refinance their balance sheets. And, when there are still uncertainties in the market, CBs are a good alternative because the yield component provides a cushion against a drop in the underlying equities....

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