Z.ai raises $5bn in Hong Kong including $3bn of zero-interest bonds
Z.ai, the Chinese model developer listed in Hong Kong as Zhipu, has raised about $5bn in a single move. Roughly $2bn came from placing 21.97 million new shares at HK$714, about 10 percent below the previous close.
The other $3bn came from RMB 20.14bn of convertible bonds maturing in September 2027, and those bonds carry no coupon at all.
Reuters reported the terms from the company’s filing. The bonds were priced to yield between minus 0.5 percent and zero, so buyers are taking a small certain loss on the debt in exchange for the option underneath it. They can convert at HK$892.5, a 25 percent premium to what the placement investors paid.
Lending money at a negative return only makes sense if the equity is what you actually want. On those terms, the bond is less a loan than a ticket, and the size of the book suggests plenty of...
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