Stanley Ho's Shun Tak Raises $200 Million

Shun Tak Holdings on Thursday completed the first convertible bond by an issuer with exposure to Hong Kong real estate in 16 months, attracting some demand because of a perceived scarcity value. The company also has real estate developments in Macau as well as other assets related to the tourism industry in the former Portuguese colony, including the main ferry service between Hong Kong and Macau, which means it offers an alternative way to play the casino boom without owning a gaming company.

Investors also liked the Hong Kong dollar-denominated CB because it was priced competitively. Some analysts estimated the theoretical value at above par, and those estimates were backed up by the fact that the CB traded up on Friday—despite a significant slip in the share price. At the end of Hong Kong trading, the bonds were quoted at above 102. That said, this was the first publically marketed CB by an Asian issuer this year to fix both the coupon and the conversion premium in the investor-friendly half of the indicated ranges. One CB specialist noted that the deal was priced more aggressively than other CBs with limited or no stock borrow such as those from Chinese real estate developers Yanlord Land Group and SRE Group in June. This suggests that the company too got a pretty good deal.