ZTO greenshoe lifts 1.5% five-year convertibles to $1 billion

By Marisa Wong

Los Angeles, Sept. 1 – ZTO Express announced that the initial purchaser of its recently priced 1.5% convertible senior notes due 2027 exercised its $130 million over-allotment option in full, bringing the total size of the offering to $1 billion. The offering closed on Monday, according to a Wednesday press release.

ZTO priced $870 million of the convertible notes with an initial conversion premium of 30% after the market close on Aug. 24, as previously reported.

A market source had 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 was 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.

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