Cheung Kong Issues HK$500 Million Equity-Linked Bond

by Mary Swire, Tax-News.com, Hong Kong

20 January 2005

Cheung Kong (Holdings) Limited, the Hong Kong property firm of billionaire Li Ka-shing, has announced the launch of a 30-month equity-linked note, the third retail issue under Cheung Kong's HK$10 billion (US$1.28 billion) Retail Note Issuance Programme.

The HK$500 million bond, which has a 30-month term, carries a fixed coupon of 9.38% for the first 12 months, the firm announced on Tuesday.

The coupon rate for the remainder of the paper’s life will be linked to the share performance of the Cheung Kong Group’s four Blue Chip stocks – Cheung Kong (Holdings) Limited, Hutchison Whampoa Limited, Cheung Kong Infrastructure Holdings Limited and Hongkong Electric Holdings Limited.

The coupons will be calculated according to the best performing stock, subject to a maximum of 8% and a minimum of 0% of the principal invested, and will offer a maximum coupon of 25.38% over the two and a half years.

Commenting on the launch, Mr Edmond Ip, Executive Director of Cheung Kong (Holdings) Limited, said: "The structure of the HKD equity-linked note is extremely attractive, offering investors high returns through a combination of a fixed coupon and growth potential of the Cheung Kong Group’s four blue chip companies.”

Meanwhile, Mr Dickson Law, Vice President–Fixed Income/Derivatives of Fortis Bank, the institution underwriting the bond, added: “The retail market continues to be flushed with liquidity, and this note offers a rare opportunity for investors to participate in the growth of the Cheung Kong Group.”

The issue date of the note is expected to be 17 February 2005, and the minimum purchase amount will be HK$50,000.

The subscription is to be made on a first-come-first-served basis and the period will be between 19 January and 2 February, 2005.

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