OREANDA-NEWS. December 19, 2014. China Petrochemical Development raised USD 132 million from a zero-coupon convertible bond on Thursday to help it fund construction of a greenfield plant in the mainland’s Jiangsu province.

The deal has a five-year maturity with a three-year investor put and an issuer call after three years.

China Petrochemical’s convertible bond allows the company to raise capital at a yield of 1.75%. The securities will convert to equity at a premium of 18% over the stock’s closing price on Tuesday of NTD 9.15 per share, in the middle of the guidance of 15% to 25%.

The conversion price was set at NTD 10.80 per share, towards the top half of the NTD10.52 to NTD 11.44 per unit range initially offered when books opened under Barclays, the sole global coordinator and bookrunner.

The convertible, described as a credit-enhanced zero-coupon on the term sheet, had the benefit of irrevocable standby letters of credit (SLBC) issued separately by Taiwan’s CTBC Bank and Taiwan Cooperative Bank. Using two banks to enhance the credit is unusual — typically issuers will use one bank. China Petrochemical elected to go with two banks to strengthen its credit, according to a source close to the deal.

“It was an SLBC-backed convertible bond by two of the larger banks in Taiwan. Both banks are pretty comparable and are A- rated [by S&P],” the source told FinanceAsia. Having the two banks enhancing the credit of the chemicals company — which is in a notoriously volatile sector — was key in securing investors during the bookbuild.