Thursday, July 7, 2011

Hanjin Raises $150M In Bond Sale

South Korea-based shipping and logistics giant Hanjin Shipping on Wednesday raised $150 million from a sale of five-year convertible bonds, as the firm eyes expanding its fleet of more than 200 vessels and the acquisition of additional terminals worldwide.

Hanjin officials said the firm is moving to position itself as a global logistics leader. The firm has also been expanding its third-party logistics and ship repair yard business as part of its business diversification efforts. Hanjin Shipping currently operates out of four regional headquarters (Paramus, NJ; Seoul, S. Korea; Hamburg, Germany; and, Singapore), 200 overseas branch offices, and 30 local corporations.

The US dollar-denominated bonds carry a coupon and yield of 4 percent.

The conversion price was set at $27.85, which represents a 20 percent premium over the stock’s closing price of $23.21 on July 6. The conversion premium was marketed in a range between 20 percent and 25 percent.

The transaction was launched with a base issue size of $150 million and an upsize option of $50 million, which can be exercised within the first 30 trading days.

The five-year offering will mature in 2016, but investors have the option to put the bonds back to the issuer on the third year. There is an issuer call after three years subject to 130 percent trigger. J.P. Morgan was the sole book-runner of the deal.

Hanjin announced in June that the firm planned to place an $845.9 million order for five new 13,000 TEU vessels, that will most likely end up in the Asia-Europe trade.