Emaar places $450m convertible notes

Dubai-based Emaar Properties said it has successfully placed up to $450 million in convertible notes due in 2015, increasing the size of the issue from $375 million due to strong investor demand, the company said in a statement.

"The company intends to use the net proceeds of the offering to refinance short-term liabilities and for general corporate purposes," it said.

Emaar is now offering $450 million of convertible notes with a potential maximum size of $500 million if a $50 million over-allotment option is exercised. JP Morgan, Royal Bank of Scotland and Standard Chartered are the bookrunners on the deal.

Settlement is expected to take place on or around 20 December. The Company has granted the managers an over-allotment option to subscribe for up to an additional $50 million of notes, exercisable on or prior to 14 December 2010.
 
The notes, expected to be issued by Emaar's wholly-owned subsidiary Pyrus Limited, will be guaranteed by the company and carry a coupon of 7.5 per cent cent and will be convertible into Emaar shares. They will be listed on the Luxembourg Euro MTF market.

The initial conversion price has been set at Dh4.75 a share representing a premium of 25 per cent to the closing price of Emaar shares on the Dubai Financial Market on September 29, Emaar said in the statement.