DEAL: Lenovo’s $850 million preferred notes

Author: Amélie Labbé | Published: 13 Apr 2017

Lenovo’s latest dual-tranche issuance comprised preferred perpetual notes, an asset that is expected to feature increasingly in APAC debt deals.

The Reg S issuance comprised a senior tranche of $500 million 3.875% notes due 2022 (listed in Hong Kong), under the Chinese group’s existing $3 billion medium-term note programme. It also included a subordinated tranche of $850 million 5.375% perpetual notes in the form of cumulative preferred shares, which are subject to a performance guarantee from Lenovo.

"The five-year debt securities are straightforward but the preferred shares are different, as it’s a wholly-owned subsidiary that issued them," said Cleary Gottlieb Steen & Hamilton counsel Robert Williams, who advised Lenovo.

The preferred notes were issued by a Cayman Islands-based special purpose vehicle (SPV), Lenovo Perpetual Securities. Under...



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