Wilmar braves market with $500 million CB

The bonds are re-offered below par as risk-averse investors, and a lack of hedging opportunities, pose a challenge.
AsiaÆs leading crude palm oil producer, Wilmar International, yesterday launched a convertible bond issue that, from its size alone, seemed like a brave proposition in the current volatile market environment. At $500 million, this is the largest CB by a Singapore issuer this year after CapitaLandÆs $655 million offering in May.

One could argue that with Singapore-listed Wilmar having grown into an $18.7 billion market cap giant following three mergers in 12 months, the deal was of an appropriate size. However, the free-float of the stock is still quite small at less than 14%, which means the ability to hedge the equity option was ôless than perfectö to use the words of one observer....
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