stx-pan-ocean-achieves-25-premium-on-unhedgeable-cb

STX Pan Ocean achieves 25% premium on unhedgeable CB

The Korean bulk carrier raises $200 million to part fund a recent purchase of new ships.

STX Pan Ocean, Korea's largest bulk shipping company, last night raised $200 million from a five-year convertible bond that seems to have benefitted from expectations of a continued improvement in bulk shipping rates. According to a source, the deal was a bit more than 1.5 times covered at the final price and attracted about 70 investors.

With no stock borrow available, investors were not able to hedge the equity portion of the CB and as a result most of the demand came from fundamental investors -- many of whom were based in Europe. Their belief in the potential upside for the stock was evident by the fact that the company was able to fix the...

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