Mengniu unlocks share value through EB

By issuing an exchangeable bond into China Modern Dairy, the dairy maker can potentially offload unwanted shares accumulated through a mandatory offer earlier this year.

China Mengniu Dairy provided some relief for equity-linked investors on Thursday by selling $194.8 million worth of bonds exchangeable into shares of Hong Kong-listed China Modern Dairy, bringing just the fourth equity-linked deal in Asia ex-Japan this year.

The transaction followed deals from Nanya TechnologyZhejiang Expressway and Ennoconn worth a combined $1 billion. That is only 21% of the $4.7 billion sold throughout last year although it should be noted that investors enjoyed a bumper 2016 after bond sales by investment grade issuers such as CRCC as well as rare high-yield names like Sunshine 100 China Holdings.

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