Ad­vanced Semi­con­duc­tor En­gi­neer­ing prices over­seas bonds at 27% pre­mium

The China Post - - TAIWAN BUSINESS -

Tai­wan-based Ad­vanced Semi­con­duc­tor En­gi­neer­ing Inc. (ASE,

), the world’s largest in­te­grated cir­cuit pack­ag­ing and test­ing ser­vices provider, an­nounced late Thurs­day that it has prices its latest tranche of over­seas con­vert­ible bonds at a 27 per­cent pre­mium over the clos­ing share price on the same day.

Af­ter the high pre­mium in pric­ing news was re­leased, shares of ASE out­per­formed the broader mar­ket Fri­day, to end up 0.81 per­cent at NT$43.30 (US$1.40) on the Tai­wan Stock Ex­change, where the weighted in­dex closed down 0.14 per­cent.

The 2.75- year bonds worth US$200 mil­lion car­ry­ing a zero coupon rate were well re­ceived in the mar­ket and were six times over­sub­scribed so that ASE priced the tranche of the bonds at NT$54.55 in con­ver­sion price, which rep­re­sented a 27 per­cent pre­mium over Thurs­day’s clos­ing price of NT$42.95.

An­a­lysts said that the high pre­mium in the bond pric­ing re­flected in­vestors’ op­ti­mism to­ward ASE’s earn­ings prospects as the com­pany has taken the lead over its peers in high-end pro­cesses, such as the sys­tem-in-pack­age tech­nol­ogy.

ASE said that the bonds are sched­uled to be is­sued and go listed in the Sin­ga­pore stock ex­change on July 3. The bonds will be ma­tured on March 27, 2018.

The IC firm said that the pro­ceeds from the bond sale will be used to pay for its pur­chases of pro­duc­tion equip­ment over­seas de­nom­i­nated in the U.S. dol­lar.

Mar­ket an­a­lysts said that ASE de­cided to is­sue the bonds at the mo­ment be­cause the U.S. Fed­eral Re­serve is ex­pected to kick off an in­ter­est rate hike cy­cle later this year, which will boost fund-rais­ing costs for en­ter­prises.

ASE said that it will use the ex­ist­ing 120 mil­lion shares it pur­chased from the mar­ket un­der a share buy­back pro­gram in March for the fu­ture con­ver­sion of the bonds for its shares.

The use of the shares bought un­der the re­pur­chase pro­gram in- stead of is­suance of new shares for con­ver­sion will not lead to an ex­pan­sion in its paid-in cap­i­tal and a di­lu­tion of its earn­ings per share, the com­pany said.

In an an­nual gen­eral meet­ing held Tues­day, ASE Chief Op­er­at­ing Of­fi­cer Tien Wu told the com­pany’s share­hold­ers that the IC firm is ex­pected to see its sales growth mo­men­tum pick up from quar­ter to quar­ter in the sec­ond half of this year af­ter in­ven­tory ad­just­ments in the first half faced by the global IC in­dus­try.

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