Hong Kong Exchanges and Clearing Limited (HKEx) has today announced the issuance of an aggregate principal amount of US$500 million of convertible bonds (the Convertible Bonds). The size of the transaction was increased from US$400 million to US$500 million in light of exceptionally strong demand from global investors. The Convertible Bonds, which mature in 2017 and bear an annual coupon of 0.50%, are convertible in the circumstances set out in their Terms and Conditions into shares of HKEx at an initial Conversion Price of HK$160.00 per Share (subject to adjustments).

The estimated net proceeds from the Subscription, after deduction of issuance fees, amount to approximately US$496,750,000. HKEx intends to use the net proceeds to fund part of the previously announced acquisition of the entire issued ordinary share capital of LME Holdings Limited (LMEH), the holding company of the London Metal Exchange (LME). HKEx intends to simultaneously reduce the aggregate amount committed under the bank facilities entered into by HKEx on 15 June 2012 in relation to the acquisition of LMEH.

"With the improvement in market sentiment in recent weeks, we saw a window to raise capital at a significant premium to our current share price. This convertible bond offering has allowed us to raise a substantial proportion of the longer-term capital required to fund our acquisition of the LME at favourable terms," said HKEx Chief Executive Charles Li.

Assuming full conversion of the Convertible Bonds at the initial Conversion Price of HK$160.00 per Share, the Convertible Bonds will be convertible into approximately 24,228,437 Shares, representing approximately 2.18% of the issued share capital of the Company as enlarged by the issue of the Conversion Shares.

HKEx will file an application to the Securities and Futures Commission to list, and for permission to deal in, the Convertible Bonds and the Conversion Shares on the Stock Exchange.

The Bookrunners and Lead Managers acting for HKEx on this transaction are Deutsche Bank, HSBC, and UBS.

More details can be found in the regulatory announcement issued by HKEx today.

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