ZTO Express prices $1.5 billion convertible notes offering

ZTO Express (Cayman) Inc. (NYSE: ZTO) announced the pricing of $1.5 billion in convertible senior notes due 2031. The notes were offered to qualified institutional buyers outside the United States under Regulation S of the Securities Act.

The notes carry an interest rate of 0.925% per year, payable semiannually beginning September 1, 2026. They mature on March 1, 2031, unless earlier redeemed, repurchased or converted. The initial conversion rate is 32.3130 Class A ordinary shares per $1,000 principal amount of notes, equivalent to a conversion price of approximately HK$241.79 per share.

ZTO plans to use up to $1 billion of net proceeds to fund share repurchases of Class A ordinary shares and American depositary shares under its repurchase programs. The remaining approximately $500 million will fund concurrent share repurchases, capped call transaction premiums and general corporate purposes.

Concurrent with the notes pricing, ZTO agreed to repurchase 18,254,400 Class A ordinary shares from certain note purchasers at HK$179.10 per share, the closing price on the Hong Kong Stock Exchange on February 4, 2026. This concurrent repurchase is designed to facilitate initial hedging by note purchasers.

The notes will not be convertible until 40 days after original issuance. After that period, holders may convert at any time prior to five trading days before maturity. ZTO may elect to pay cash, shares, or a combination upon conversion.

The company entered into capped call transactions with initial purchasers to reduce potential dilution from note conversions. The cap is initially set at $35.9906, representing a 57% premium over the February 4 closing price.

ZTO expects to close the offering on or about February 9, 2026, subject to customary closing conditions.

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