UPDATE 1-China's Home Inns selling up to $149 mln conv bonds

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HONG KONG, Dec 4 (Reuters) - Home Inns & Hotels Management Inc (HMIN.O) is selling up to 1.1 billion yuan ($148.6 million) in zero-coupon convertible bonds, according to a term sheet obtained by Reuters on Tuesday, despite Asian primary debt markets being at a virtual standstill.

Issuers are reluctant to raise money during a global credit crunch but some deals in convertible and local-currency bonds are still expected to go through.

The conversion price has been set at $52.31 to $54.25, which would provide a 35-40 percent premium to Home Inns' close of $38.75 on Monday.

Home Inns, a Chinese budget hotel operator listed on Nasdaq late last year, is selling 900 million yuan in 5-year bonds due on Dec. 10, 2012, with an option for 210 million yuan more, the term sheet said. The bonds carry a 3-year put option.

Proceeds from the sale will be used to develop new hotels and fund acquisitions, as well as general purposes.

Credit Suisse (CSGN.VX) and Merrill Lynch MER.N are the joint bookrunners for the sale.

Home Inns is considering expanding beyond mainland China towards Asia within two to three years, its chief financial officer told reporters in early November.

China's budget hotel industry has grown rapidly in recent years, spurred by rising demand from small businesses and families on holiday.

Home Inns is approaching capital markets as other Asian issuers have been scared off raising money in the debt markets, with Chinese property developer Country Garden Holdings (2007.HK) pulling an up to $1 billion bond sale last month.

However, a limited number of convertible bond or local-currency deals could go through, bankers have said, though the window of opportunity is fast closing in the last month of the year, a period during which investors and investment banks close their books.

Chinese dry bulk shipper Pacific Basin (2343.HK) this week issued $350 million worth of convertible bonds at a 27 percent premium to Monday's closing share price.

Meanwhile, Malaysian buyout firm Binariang plans to sell about 12 billion ringgit of local-currency bonds by next week to finance its takeover of a mobile network operator, a source familiar with the deal said on Monday. (Reporting by Rafael Nam; Editing by Louise Ireland)