Trip.com Group Limited Announces Pricing of Offering of US$1.3 Billion Cash-par Settled Convertible Senior Notes
Trip.com Group (Nasdaq: TCOM; HKEX: 9961) announced the pricing of its US$1.3 billion convertible senior notes due 2029. These notes are offered to qualified institutional buyers and bear an interest rate of 0.75% per year, payable semiannually. The company has also granted an option to purchase an additional US$200 million in notes. The proceeds will be used for debt repayment, overseas business expansion, and working capital needs. Concurrently, Trip.com plans to repurchase approximately 6 million ADSs worth US$300 million, to offset potential share dilution. The initial conversion rate is 15.0462 ADSs per US$1,000 principal, with a conversion price of approximately US$66.46 per ADS, a 32.5% premium over the closing price on June 4, 2024. Conversion and redemption terms are specified, and the offering is expected to close around June 7, 2024.
- Successful pricing of US$1.3 billion convertible senior notes due 2029.
- Option granted to purchase an additional US$200 million in notes.
- Proceeds to be used for debt repayment, overseas business expansion, and working capital.
- Interest rate of 0.75% per year, payable semiannually, is relatively low.
- Concurrent repurchase of 6 million ADSs worth US$300 million to offset share dilution.
- Initial conversion rate of 15.0462 ADSs per US$1,000 principal, with a 32.5% conversion premium.
- Offering expected to close on or about June 7, 2024, providing timely capital.
- Convertible notes mean potential future dilution of shares.
- The interest rate, albeit low, adds to the company's financial obligations.
- Repurchase activities may affect market prices of ADSs and ordinary shares.
- Potential for convertible arbitrage strategies to impact stock prices.
- The offering is not registered under the Securities Act, limiting potential investors.
Insights
The announcement of Trip.com Group Limited's offering of
Trip.com's strategic use of proceeds from the notes offering to expand its overseas business is noteworthy. Given the rebound in global travel post-pandemic, this could position the company well to capture increasing international travel demand. Additionally, the concurrent repurchase of approximately 6 million ADSs at
The issuance of these notes under Rule 144A of the Securities Act highlights that they are being offered to qualified institutional buyers only, which implies a level of sophistication and understanding of the associated risks. This approach can provide the company with a more stable investor base. However, the lack of registration under the Securities Act means these securities cannot be readily offered or sold within the United States to non-institutional investors, limiting liquidity. Also, the company has the right to redeem the notes for cash under specific conditions, such as changes in tax laws or if less than
The Company plans to use the net proceeds from the Notes Offering for repayment of existing financial indebtedness, expansion of its overseas business, and working capital needs.
Terms of the Notes Offering
The Notes will be general unsecured obligations of the Company and bear interest at a rate of
Prior to the close of business on the business day immediately preceding the 50th scheduled trading day before the maturity date, the Notes will be convertible at the option of the holders only upon satisfaction of certain conditions and during certain periods. On or after the 50th scheduled trading day before the maturity date until the close of business on the third scheduled trading day immediately preceding the maturity date, holders may convert their Notes at their option at any time. The initial conversion rate of the Notes is 15.0462 American depositary shares ("ADSs"), each currently representing one ordinary share of the Company, per
The Notes contemplate cash-par settlement upon conversion. Upon conversion, the Company will pay cash up to the aggregate principal amount of the Notes being converted and have the right to elect to settle the conversion consideration for amounts in excess of the aggregate principal amount using cash, ADSs, or a combination of cash and ADSs. Holders may elect to receive ordinary shares in lieu of any ADSs deliverable upon conversion, subject to certain conditions and procedures.
In addition, the Company may redeem for cash all but not part of the Notes in the event of certain changes in the tax laws or if less than
Concurrent Repurchase
Concurrently with the pricing of the Notes Offering, the Company plans to repurchase approximately 6.0 million ADSs in an aggregate amount of approximately
The Concurrent Repurchase will be funded by cash on hand, and is generally expected to offset some of the potential dilution to the holders of the Company's ordinary shares (including ordinary shares represented by ADSs) upon conversion of the Notes, taking into the account the settlement method of the Notes.
Other Matters
Any repurchase activities of the Company, whether concurrently with the pricing of the Notes or otherwise pursuant to its share repurchase plans, could increase, or reduce the magnitude of any decrease in, the market price of the ADSs and ordinary shares and the price of the Notes.
The Company expects that potential purchasers of the Notes may employ a convertible arbitrage strategy to hedge their exposure in connection with the Notes. Any such activities by potential purchasers of the Notes following the pricing of the Notes and prior to the maturity date could affect the market price of the ADSs and ordinary shares and the trading price of the Notes. The effect, if any, of the activities described in this paragraph, including the direction or magnitude, on the market price of the ADSs and ordinary shares and the trading price of the Notes will depend on a variety of factors, including market conditions, and cannot be ascertained at this time.
The Notes, the ADSs deliverable upon conversion of the Notes, if any, and the ordinary shares represented thereby or deliverable upon conversion of the Notes in lieu thereof have not been registered under the Securities Act, or any state securities laws. They may not be offered or sold within
The Company expects to close the Notes Offering on or about June 7, 2024, subject to the satisfaction of customary closing conditions.
This press release shall not constitute an offer to sell or a solicitation of an offer to purchase any of these securities, nor shall there be a sale of the securities in any state or jurisdiction in which such an offer, solicitation, or sale would be unlawful.
This press release contains information about the pending Notes Offering, and there can be no assurance that the Notes Offering will be completed.
Safe Harbor Statement
This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the
About Trip.com Group Limited
Trip.com Group Limited (Nasdaq: TCOM; HKEX: 9961) is a leading global one-stop travel platform, integrating a comprehensive suite of travel products and services and differentiated travel content. It is the go-to destination for travelers in
For further information, please contact:
Investor Relations
Trip.com Group Limited
Tel: +86 (21) 3406-4880 × 12229
Email: iremail@trip.com
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SOURCE Trip.com Group Limited
FAQ
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