FinanceAsia reports that Chinese renewable energy generation company GCL-Poly has privately placed a USD200 million, 0.75%, 5 year convertible bond with PAG Investments.
GCL-Poly, also the largest supplier in China of polysilicon for solar cells, is 20% owned by Chinese sovereign wealth fund CIC.
Convertible bonds allow a bond-holder to swap the bond for shares at an agreed price. In this case the swap price was set at 21.6% above this week’s GCL-Poly share price, but the bonds can’t be converted for at least six months. The bonds include a three year put option.
It was actually quite a complex deal, with side arrangements to allow the investor to hedge, etc; FinanceAsia goes into more details. The deal was arranged by Bank of America Merrill Lynch.
For all its structuring pirouettes, it’s a climate bond in our definition (GCL-Poly is a 100% renewables company).
