Hanjin Shipping issues $150 million CB

The Korean container and bulk shipping company takes advantage of a rebound in its share price to raise capital, but triggers a 7.3% sell-off in its stock.
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The 75,000-tonne container ship Hanjin Tianjin, which was attacked by pirates in the Indian Ocean in April (AFP)
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<div style="text-align: left;"> The 75,000-tonne container ship Hanjin Tianjin, which was attacked by pirates in the Indian Ocean in April (AFP) </div>

The shipping industry’s near-term outlook remains questionable amid slowing economic growth and a debt default in Europe not quite off the table yet, but after a rebound in its share price during the past two weeks Korea’s Hanjin Shipping saw a chance to raise new capital from a convertible bond issue on Wednesday.

With the downside protection and a decent coupon, investors were comfortable buying at these levels, allowing the company to raise $150 million from a five-year deal with a three-year put that was priced at the investor-friendly end of terms. In secondary market trading yesterday the CB was bid slightly above par at 100.125.

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