Hutchison's $9.3b bond issue draws investors
Despite being absent from the international bond markets for more than 11/2 years, Hutchison Whampoa has lost none of its appeal with investors, judging from Wednesday's offering.
The Euro1 billion ($9.39 billion), 10-year bonds were 5.5 times covered within four hours of the launch and ended up being priced at the tight end of the guidance to yield 93 basis points above the mid-swap rate, or 101.7 basis points above the equivalent German bund.
It reached 99.97 basis points above the bund in the secondary market yesterday, according to market participants.
The initial price guidance was 93 to 97 basis points above the mid-swap rate.
The bonds carry a coupon of 4.125 per cent and were sold at 99.75 per cent of face value, giving a yield to maturity of 4.156 per cent, according to an e-mail sent by HSBC, which acted as joint bookrunner with ABN Amro and Deutsche Bank.
As is common for euro-denominated offers, 75 per cent of the bonds ended up with European investors, while 23 per cent went to Asia and the rest to offshore United States accounts.
ABN Asia debt syndicate banker Herman van den Wall Bake said the quick turnaround of the deal had been possible because of the Hong Kong conglomerate's status as one of the most liquid names in Asia and the fact that it already had a well-established yield curve.
The offer was used to repay some 'expensive' euro-denominated loans and none of the proceeds would be swapped into other currencies, he said.
One analyst expected Hutchison to return to the market more frequently again after this first dip in the pond.
The company last went to the bond market with a US$5 billion sale in November 2003 and raised debt that year of more than US$9 billion.