Johnson Electric makes rare move with $200m CB

Hong Kong motor company breaks 20-year absence from capital markets to lock in cheap funding.

Hong Kong’s Johnson Electric made its first venture into the capital markets in 20 years on Wednesday evening, raising $200 million through a convertible bond that investors snapped up in 90 minutes.

The company, which makes electric motors for everything from power steering to hairdryers, raised five-year money that pays investors a yield of 2.75% and converts to equity at a 37.5% premium to the closing share price on Wednesday of HK$7.46.

Sole bookrunner JP Morgan marketed the deal with a credit spread of 300bp and priced it at an implied volatility of 23%, which was just 2% inside the historical volatility of 25% and gave...

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