Lexin to Issue $300 Million in Notes to PAG in Private Placement

Lexin has secured a deal with PAG to issue $300 million in notes, at the conversion price of $14 per ADS.
Anthony RussoSep 11,2019,19:30

LexinFinTech Holdings Ltd.,(Nasdaq: LX) the consumer finance company based in Shenzhen, announced it entered a private convertible notes agreement with PAG, the Asian private equity firm, for $300 million on Wednesday.

Lexin said in a statement today that its convertible notes will expire in seven years with an interest rate of 2 percent annually. The notes will be convertible into American depositary shares at the conversion price of $14 per ADS, Lexin said. 

"PAG has a strong commitment to and deep understanding of China's financial services industry, and we have a demonstrated track record of seeking out and engaging with the industry's leading companies," Weijian Shan, the chairman and chief executive officer of PAG said in a statement today according to Lexin. "Lexin has an unparalleled platform for meeting young consumers' credit needs while strictly controlling and minimizing credit risks, which makes it unique, and we are looking forward to supporting the company as it embarks on its next stage of growth."

Lexin reported its second quarter financial results last month, as revenue reached $363.1 million, up 22 percent year-over-year. Net income narrowed to $91.5 million, or 50 cents per ADS which decreased 5 percent from a year ago. 

The convertible notes agreement didn’t seem to help Lexin’s stock today, as it traded down 3 percent, $11.13 per share on Wednesday afternoon.