E.Sun ushers dawn of new age for Asian CBs

Asian convertibles enter an era of negative yields for primary market deals.

In an increasingly familiar pattern, a Taiwanese financial holding company launched and executed a heavily oversubscribed offering within the space of a few hours yesterday Monday. E.Sun Financial Holdings raised $160 million via lead manager Morgan Stanley in a deal that closed 8.3 times covered after only three hours and the imposition of a $10 million to $15 million cap on individual orders.

Declining interest rates mean that many Asian convertibles trade on negative yields, but until yesterday no deal outside of Japan has been priced with one. Terms for E.Sun's one-and-a-half-year deal, however, show just how high the convertible market is riding at the moment, with global issuers taking advantage of...

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