5月底以来，京东、联想、阿里巴巴、携程四家中国互联网及科技公司先后发行可转换公司债券（“可转债”），发行额度总计达105亿美元。其中，阿里巴巴发行的50亿美元可转债创下了亚洲公司美元可转债规模最高纪录。

“成功的大型公司可转债发行提升了市场信心，也会吸引更多的投资人参与，增加香港资本市场的交易量和流动性。”竞天公诚律师事务所合伙人田明子律师指出。可以说，在相对“安静”的香港资本市场，可转债的发行为券商、资本市场律师带来了新的业务机会。

“后续可能会有其他公司选择在香港发行可转债，进一步提高香港资本市场的活跃度和国际影响力。”田律师说。

可转债是一种具有债权和股权双重属性的金融工具，允许持有人按照事先约定的条件和价格，将债券转换为发行公司的普通股票。

中概股公司发行可转债并非新事，但近期出现的“扎堆”发行却不多见。究其原因，“在目前的高利率环境、中概股的低迷股价，以及中国对境外融资及企业出海相关的鼓励政策等背景下，出于改善公司债务结构、海外业务拓展以及回购股份等需求，中概股企业纷纷发行可转债”，田律师解读道。

“其实在过去几年，随着利率上升，全球范围内都出现了偏好发行股权相关产品的趋势，但受到中国股市的挑战性因素等影响，这一趋势在亚洲的落地花费了更长时间。然而，伴随近期中国股市反弹，我们在2024年观察到市场对这类产品重新产生了兴趣。”年利达律师事务所资本市场合伙人纪泰旭律师从更大的时空范畴观察道。

低成本、低风险

对发行人来说，低成本是可转债的最大吸引力之一。纪律师指出，尤其在目前的美元高利率环境下，通过债券或贷款进行纯债务融资在美元市场成本较高，而可转债由于嵌入了股权期权，极大降低了利息。

以阿里巴巴为例，此次可转债利率为0.5%。据相关机构估算，根据阿里巴巴之前发行的债券报价，对应期限的普通债券利率要在5.1%以上。

“可转债转股前可以低利率换高利率债务，可转债转股后则可降低负债率，改善公司债务结构。”田律师说。

可转债的另一层好处在于，对于积极开拓海外业务、公司营收却大部分来自中国国内的公司来说，可转债能帮助公司更有效率地获得外汇并使用资金，减少汇率带来的损失。

与此同时，可转债也很受投资人青睐，尤其“对于某些类型的基金投资者来说，这类介于债权和股权之间的工具能帮助他们有效管理外部风险带来的波动性”，纪律师说。

鉴于上述特点，田律师观察道，发行可转债对于科技、互联网、新能源和生物制药等行业具有较强吸引力，“这些行业具有高成长性、高资本需求以及较强的股票上涨空间，无论从公司自身融资成本考虑还是从投资人的投资收益考虑，可转债都更有吸引力”，她说。

在纪律师看来，尤其以科技公司为代表，他们的资产负债表稳健，同时股价具备一定的波动性，这“给了投资者更多信心——意味着市场下行时，可转债有安全性；市场上行时，可转债则具备更多潜力”。

更具策略性

两位律师都指出，此波可转债发行值得关注的趋势之一，在于发行人，例如京东、阿里巴巴和携程，都同时配套了股权回购。

若持有人未来选择转换为股票，将稀释公司股权，这也是部分公司最初公布可转债消息时遭到质疑的主要原因。然而，“配套回购部分股份可以对冲可转债转股对股权稀释的影响，能够吸引长期看好公司发展的投资人，有利于公司长期稳定的发展”，田明子律师解读道。

纪泰旭律师也指出，“可转债+股票回购”的同时操作、高效执行，能使对公司股价的干扰降到最小，“对发行人和投资者都有利”。

“可转债+回购解决了两个关键问题：首先，发行人通常面临着对冲投资者做空股价的担忧——许多公司在发行可转债后经历了股价大幅下跌，组合执行模式减轻了这层忧虑；此外，典型的公开市场回购通常持续时间更长、面临的风险也就更大，组合模式也化解了这一难题。”

因此，“这为未来的可转债发行人打开了新思路：可转债不仅可以用来获取更便宜的融资，也能够更有效地回报公司股东”，纪律师说。

灵活的组合安排之外，可转债也可以更具策略性地满足公司需求。例如此波可转债中，既有面对公众发行的，也有如联想，直接针对沙特主权财富基金旗下子公司发行20亿美元零利息可转债，“这说明从纯粹的资金筹集、增强资本结构，到战略投资，可转债可以用来实现广泛的融资策略”，纪律师说。

田律师进一步解读道：“有的可转债面对公众发售，此种公司一般评级较高、市场形象较好，可以吸引更多投资者的关注，并提振市场对公司的信心；有的可转债则针对特定买家，此种方式显示了特定投资人与公司的紧密关系，以及双方进一步合作的空间。不同公司会根据自身情况及需求选择适合的可转债发行策略。”

有趣的是，由于不同资本市场对可转债发行的要求不同，发行人也可能利用其中差异，进一步满足策略需要。以A股和港股市场为例，田律师介绍道，A股市场可转债面向的主要是A股市场投资人，其发行受A股再融资有关规定和政策的限制，发行目的更多聚焦于公司实体业务发展的资金需求，也更偏向于向不特定对象的发行。

而“港股市场可转债面向的主要是国际投资人，受国际市场环境影响较大，其发行更加灵活、产品设计及资金用途也更为多样化，并根据是否引进战略投资人而做定向发行”。

“不过需要注意，中概股企业在境外发行中长期的可转债，还需考虑事先取得中国发改委关于外债的审核登记以及事后向中国证监会的备案，需要聘请专业机构进行尽早筹备。”她提醒道。

Why convertible bonds are the new darling of Chinese companies

In recent months, a wave of convertible bond issuance has breathed new life into Hong Kong’s anemic capital markets. Since late May, four major Chinese internet and technology companies - JD.com, Lenovo Group, Alibaba Group, and Trip.com - have successively issued convertible bonds totaling $10.5 billion.

Notably, Alibaba’s $5 billion issuance set a record for the largest U.S. dollar-denominated convertible bond by an Asian company. This issuance and others have lifted the spirits of Hong Kong’s bankers and lawyers hoping for a prompt revival of Asia’s erstwhile fundraising powerhouse after a persistently subdued IPO scene so far threatened to choke the city’s investment prospects.

"The successful issuance of large-scale convertible bonds boosts market confidence and attracts more investors, thereby increasing trading volume and liquidity in Hong Kong's capital market," notes Tian Mingzi, a partner at Jingtian & Gongcheng based in Beijing.  

In particular, the issuance of convertible bonds has given rise to new business opportunities that may enable other companies to follow suit in Hong Kong, thus further enhancing the market's activity and international influence, Tian adds.

Convertible bonds are a financial instrument with both debt and equity features that allow holders to convert bonds into the issuing company's common stock under predetermined conditions and prices.

The issuance of convertible bonds by China concept stocks is not something new. But what makes the latest round unusual is a combination of global macroeconomic pressure and China’s policy directives.  

"Amid the current high interest rate environment, the low stock prices of China concept stocks, and China's supportive policies for overseas financing and outbound business expansion, these companies are issuing convertible bonds to improve their debt structure, expand overseas operations, and repurchase shares,” explains Tian.

Taiki Ki, a capital markets partner at Linklaters in Hong Kong, points out that the trend of companies issuing equity-linked financing instruments “has been seen globally over the past few years in a rising interest rate environment” albeit taking longer to take hold in Asia given “challenging market conditions for Chinese equities”.

“However, with the recent rebound in Chinese equities, we are seeing significant renewed interest in this product in 2024," notes Ki.

LOW COST, LOW RISK

For issuers, one of the primary attractions of convertible bonds is their low funding cost. As the U.S. Federal Reserve stands still on “higher for longer” interest rates which have propped up the U.S. dollar, pure debt financing for issuers through bonds or loans continues to be relatively expensive.

Under this circumstance, equity-linked instruments such as convertible bonds will remain popular as the value of the embedded equity will lower interest payments, according to Ki.

Take Alibaba as an example: The interest rate on its recent convertible bond is 0.5 per cent. However, the rate on comparable term ordinary bonds previously issued by Alibaba would have exceed 5.1 percent, according to estimates from market institutions.

"Before conversion, convertible bonds can swap high-interest debt for low-interest debt. After conversion, they can lower the debt ratio and improve the company's debt structure," Tian explains.

Another perceived advantage of convertible bonds is the instrument’s ability to help well-performing domestic companies expanding overseas gain higher access to foreign exchange reserves and reduce transactional losses caused by exchange rate fluctuations.

In addition, convertible bonds have been increasingly winning the favour of investors. Apart from lowering interest payments in a high-rate environment, “such instruments offer significant arbitrage opportunities between the bond and the underlying equity for certain types of fund investors, allowing such investors the ability to manage volatility arising from external factors such as market movements and for issuers from certain regions and political tensions,” Ki adds.

Given these characteristics, convertible bond issuances tend to be popular amongst industries such as technology, internet, new energy, and biotech.

"These sectors have high growth potential, high capital needs, and significant stock appreciation potential. From the perspective of both the company's financing costs and the investor's returns, convertible bonds are more appealing," notes Tian.

What made Chinese technology companies one of the biggest players in this space recently was their robust balance sheets and a strong credit profile, coupled with volatility in the share price that bump up the value of embedded equity option.

As such, equity-linked securities including convertible notes "offer a compelling narrative for investors through the combination of strong downside protection with potential for equity up-side, including from investment grade companies which historically may have been able to source pure debt financing at a cheaper cost,” explains Ki.

CONVERTIBLE STRATEGY

The recent wave of convertible note offers have had a notable common feature: Issuers such as JD.com, Alibaba, and Trip.com have concurrently executed share buybacks in a bid to ease any dilution effect.

Indeed, there has been initial skepticism that any future conversion of bonds into shares might dilute the company’s equity. But as Tian explains, concurrent share repurchases can offset the dilution effect, attracting long-term investors who are bullish on the company’s growth, thereby supporting the company’s sustained development.

Convertibles issuances pared with a share buyback from the issuers are intended to match two significant liquidity events, according to Ki. Those are “the hedging from convertible bond investors and the share buyback from the issuer for a highly efficient execution with minimal disturbance to stock price”, which Ki believes is beneficial to both the issuer and the investors.

Such structures address two key concerns. For companies exploring a convertible bond issuance, Ki notes that the market impact of hedging investors shorting their shares could be a concern, especially with many companies experiencing significant share price declines following an issuance.

This concern could be mitigated by a simultaneous share buyback while “significantly reducing market risk associated with a more typical open market buyback where shares are bought back over longer periods of time," Ki says, adding that it could also open a pathway for companies looking at efficient methos of returning value to shareholders.

Other strategies include synthetically raising the conversion price on a convertible bond by issuers for a larger upfront cost because of improved outlook on future cash flow. This could offer companies flexibility to manage various levers, including cost of funding and dilutive impact to shareholders, according to Ki.

“Such strategies also send a bullish signal to the market, as the issuer is effectively signaling expectations as to future share price appreciation,” he adds.

Beyond flexible combinations, convertible bonds could also be strategically tailored to meet company needs. For instance, while some notes were offered to the public, Lenovo Group targeted a specific $2 billion zero-coupon convertible bond to a subsidiary of the Saudi sovereign wealth fund.

"This illustrates the breadth of financing strategies involving convertible bonds, from pure fund raising and enhancing capital structure to strategic investments," says Ki.

Tian further unpacks the variety of strategic purposes underpinning convertibles issuances. "Some convertible bonds are publicly offered, typically by companies with higher ratings and better market reputations, attracting more investors and boosting market confidence,” she says.

“Others are aimed at specific buyers, showcasing the close relationship and potential for further cooperation between the investor and the company. Companies will choose issuance strategies based on their specific circumstances and needs,” Tian adds.

NO “ONE-SIZE-FITS-ALL”

Different capital markets also have varying requirements for convertible bond issuances, which issuers can leverage to meet strategic needs.

For instance, the A-share and Hong Kong stock markets differ significantly. "The A-share market targets A-share investors and is subject to A-share refinancing regulations and policies and focuses on funding for the company's core business development, usually through non-specific issuances," Tian explains.

In comparison, "the Hong Kong market targets international investors and is heavily influenced by the international market environment. It offers greater flexibility, diverse product design, and varied uses of funds, including directed issuances for strategic investors,” she adds.

Tian believes it is essential for Chinese concept stocks issuing medium to long-term convertible bonds overseas to consider obtaining pre-approval from the National Development and Reform Commission (NDRC) for foreign debt and post-issuance filing with the China Securities Regulatory Commission (CSRC).

Such a step would necessitate early preparation with professional institutions, Tian advises.