Powerchip prepares CB

The first of the Taiwanese DRAM manufacturers returns to the international capital markets with a convertible bond.

A $90 million convertible bond for Powerchip Semiconductor Corp PSC is likely to be launched today following the completion of pre-marketing last week. Investors say that lead manager Nomura has been canvassing them with a highly defensive structure that offers a leveraged equity play on a turnaround in DRAM prices.

The five-year deal has an annual puttable structure, but breaks new ground by being the first to incorporate compulsory special re-set clauses. Unlike previous defensive Taiwanese CB structures, which have incorporated annual re-sets subject to an 80% share price floor, PSC's deal will have no floor at all.

The structure has already been used once this year by Chunghwa Picture Tubes CPT, which...

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