New York, Nov. 29 - CNOOC Ltd. priced $850 million of zero-coupon convertible bonds due 2009 to yield 1% with a 35.75% initial conversion premium.
J.P. Morgan Securities Ltd., Merrill Lynch International and UBS AG were joint bookrunners for the Regulation S offering, which was issued by CNOOC's CNOOC Finance (2004) Ltd. subsidiary.
The Hong Kong-based oil and gas exploration and production company will use proceeds for working capital and general corporate purposes.
"CNOOC Ltd.'s strategy remains focused on developing our offshore resources and expanding our natural gas platform," said Fu Chengyu, CNOOC's chairman and chief executive officer, in a news release.
"The convertible bond issue enhances our financial flexibility and secures low-cost funding to support our growth strategy."
Chief financial officer and senior vice president Mark Qiu noted the deal was the largest international convertible bond issue by a Chinese company.
"The company took advantage of favourable market conditions to further optimize our capital structure. It's another hallmark of our prudent and active financial management strategy," he added.
| Issuer: | CNOOC Finance (2004) Ltd. (CNOOC Ltd.)
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| Issue: | Convertible bonds
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| Amount: | $850 million
|
| Greenshoe: | $150 million
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| Maturity: | Dec. 15, 2009
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| Coupon: | 0%
|
| Price: | Par
|
| Redemption price: | 105.114%
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| Yield: | 1%
|
| Initial conversion premium: | 35.75%
|
| Conversion price: | HK$6.075
|
| Put: | Dec. 15, 2007 at 103.038
|
| Call: | Dec. 15, 2007 onwards, entire issue only
|
| Pricing date: | Nov. 25
|
| Settlement: | Dec. 15
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| Bookrunners: | J.P. Morgan Securities Ltd., Merrill Lynch International, UBS AG
|
| Distribution: | Regulation S
|
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