Chunghwa Picture Tubes calls one CB and prices another

The Taiwanese large screen flat panel display manufacturer priced a new $70 million convertible on Friday.

With Citibank Taipei as lead manager, Chunghwa Picture Tubes CPT has offered investors an enormously cheap volatility play.

Priced at the tight end of indicative terms, the deal has a five-year final maturity and zero coupon with a par redemption structure. The conversion premium has been set at 12.2% to the stock's NT$40.2 close Thursday, against an indicative range of 7% to 13%, with a two-year call subject to a 130% hurdle and two-year put at 109% to yield 4.4%. There is also an annual re-fix subject to an 80% floor.

The underlying valuation comprises a bond floor of 94.5%, theoretical value of 120% and implied volatility of 18%. This is...

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