Hon Hai board approves up to $60 billion bond issuance

Taiwan-based electronics giant Hon Hai Precision Industry Co., commonly known as Foxconn, announced on Monday that its board of directors has approved the issuance of unsecured corporate bonds, with a maximum aggregate amount set at NT$60 billion ($1.86 billion). The bonds can be issued all at once or in stages, according to a press release.

Each bond will hold a face value of NT$1 million and will be issued at par. Hon Hai intends to utilize the funds raised from the bonds to repay existing debts and replenish working capital. The precise coupon rate will be determined at the time of pricing, and the issuance will depend on prevailing market conditions. The bonds will be offered publicly through an underwriter, although the specific underwriter, trustees, and payment agents have yet to be decided.

The bonds are non-convertible into shares and lack collateral. Importantly, the issuance does not rely on shelf registration. The company has not set forth any criteria for selling back or buying back the bonds. Hon Hai Precision Industry Co., or Foxconn, is a prominent Taiwanese manufacturer of electronics.