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Abstract
Asia is home to many young and fast-growing companies operating within high growth economies, a combination which makes pre-IPO convertible bonds particularly appealing. It is hardly surprising therefore that some of the recent public pre-IPO convertible bonds have been from issuers whose operations are in Asia. However, the diversity and relative immaturity of the various legal and regulatory regimes in Asia means that there are issues that investors and issuers alike need to keep in mind in relation to Asian pre-IPO convertible bonds. Regulators in some Asian jurisdictions, such as India, still retain aspects of a merit-based approach to IPOs. They may, for example, only allow the IPO to proceed if the pricing of the IPO shares falls within a certain fixed range. A second pricing-related issue arises in relation to transactions where the conversion price is set at a discount to the IPO price - and hence gives converting bondholders a better deal than investors in the IPO.