Qudian to Offer $250 Million in Convertible Senior Notes; Stock Tumbles 10%

Shares in Qudian slid Wednesday after the consumer credit provider said it seeks to sell convertible senior notes with a seven-year maturation period.
Belinda ZhouJun 27,2019,06:55

Qudian Inc. (NYSE: QD), a provider of online small consumer credit products in China, announced today it planned to offer up to $250 million in convertible senior notes due 2026. 

The Xiamen-based company said it planned to use the proceeds from the offering for the cost of certain capped call transactions and other general corporate purposes, including strategic investments in complementary businesses, development of the open platform and potential share repurchases.

The capped call automatically exercises when the underlying asset close or above the predetermined level to reduce potential dilution to existing holders, according to the statement. 

In the note offering, Qudian intends to grant the initial purchasers a 30-day option to purchase up to an additional $37.5 million aggregate principal amount of the notes.

Shares in Qudian were trading down more than 7 percent today to $7.81 per share intraday Wednesday.