Chicago, Aug. 24 – ZTO Express priced an $870 million offering of 1.5% convertible senior notes with a five-year tenor on Wednesday after the market close, according to a press release.
There is a 13-day greenshoe for an additional $130 million of notes.
The initial conversion premium priced as 30%. A market source said price talk was for a coupon of 1% to 1.5% and an initial conversion premium of 30% to 35%.
Goldman Sachs & Co. LLC is the bookrunner for the Rule 144A offering.
The notes are non-callable but may be redeemed for cash if 10% or less of the principal amount remain outstanding or upon a tax event.
They are putable on Sept. 2, 2025 or upon a change of control or delisting event.
The notes will be settled in American Depositary Shares, cash or both at the company’s option.
Holders may request to receive class A ordinary shares fungible with the class A ordinary shares listed on the Hong Kong Stock Exchange in lieu of ADSs upon conversion.
In connection with the offering, the company will enter into capped call transactions. The price of the capped call transactions is initially $36.48 per ADS.
Proceeds will be used to cover the cost of the call spread, to expand and invest in its logistics ecosystem and for general corporate purposes.
ZTO is a Shanghai-based express delivery company.
Issuer: | ZTO Express
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Amount: | $870 million
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Greenshoe: | $130 million
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Issue: | Convertible senior notes
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Maturity: | Sept. 1, 2027
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Bookrunners: | Goldman Sachs & Co. LLC
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Coupon: | 1.5%
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Price: | Par
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Yield: | 1.5%
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Conversion premium: | 30%
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Conversion price: | $31.62
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Conversion rate: | 31.6296
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Call: | Non-callable
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Change of control: | At par
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Trade date: | Aug. 24
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Settlement date: | Aug. 29
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Distribution: | Rule 144A
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Price talk: | 1% to 1.5%; initial conversion premium of 30% to 35%
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Stock symbol: | NYSE: ZTO and SEHK: 2057
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Stock price: | $24.32 per ADS on Aug. 24
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Market capitalization: | $20.68 billion
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