The insurer would need Chinese regulatory approval to proceed with a convertible bond sale
Ping An Insurance (Group) is considering a convertible bond sale this year, according to people familiar with the matter, following in the footsteps of Chinese technology companies including Alibaba Group Holding.
Ping An is in preliminary talks with investment banks to lay the groundwork for a sale that could range from US$2 billion to as much as US$5 billion, the people said, asking not to be identified because the matter is private. Considerations are at an early stage and Ping An could decide not to proceed with a sale, they said.
The insurer would need Chinese regulatory approval to proceed with a convertible bond sale, the people said.
A representative for Ping An said the company had no information to share.
Chinese firms have been turning to convertible bonds to raise funds at cheaper rates than traditional debt. They’ve been particularly popular in the tech sector – Alibaba sold a US$5 billion convertible bond in May, a record dollar-denominated sale by an Asian company.
JD.com also sold a US$2 billion convertible bond in May, a figure matched by Lenovo Group, which plans to sell zero-coupon convertible bonds to a unit of Saudi Arabia’s sovereign wealth fund.
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Ping An will use the proceeds to help with financing purposes if it proceeds with a sale, the people said.
Ping An’s net income has been hit by stock-market declines and lower bond yields eroding investment returns. Shares in Ping An, which has been looking at cutting its 8 per cent stake in HSBC Holdings, have fallen about 28 per cent in Hong Kong over the past 12 months, leaving it with a market value of US$94 billion.
Ping An said last week that its stake in online financial services company Lufax Holding will rise to about 56.8 per cent following a special dividend. BLOOMBERG
