Tullow shares were down 12 per cent at 211.5 pence at 10.55am, the lowest since April 18. The bonds, due in 2021 and offered at a conversion price set at a 30-35 per cent premium to the average Tullow share price on July 6, will be offered to institutional investors at a coupon between 5.875-6.625 per cent, Tullow said yesterday. An initial negative share price reaction had been expected due to bond investors typically hedging their purchases by taking a short position on the share price, a source close to the company said. Africa-focused oil explorer Tullow Oil has issued convertible bonds worth $300 million (Sh30.3 billion), a move it said was designed to diversify its investor base, sending its shares to the lowest in nearly three months. "The dilution should be limited and this is a useful diversification of funding for Tullow," said analysts at RBC Capital Markets who rate Tullow's stock as 'outperform'.

Source: The Star July 07, 2016 01:07 UTC