Hutchison to buy back up to US$1.5b of bonds
Hutchison Whampoa, the flagship of billionaire Li Ka-shing, plans to buy back up to US$1.5 billion of outstanding bonds that mature between 2013 and 2033, according to a stock exchange announcement.
Hutchison said it would buy back bonds maturing in 2013 that were sold with a coupon of 6.5 per cent and in 2014 with a coupon of 6.25 per cent. Bonds due in 2027 with a coupon of 7.5 per cent and in 2033 with a coupon of 7.45 per cent would also be part of the buy-back, the company said.
Investors have until June 8 to sell the bonds back to Hutchison, and an early-buy-back date of May 21 has been set. US bank Morgan Stanley is managing the buy-back.
'They've done it before, and buying back debt seems sensible, so why not do it?' said Danie Schutte, an analyst at CLSA Asia Pacific Markets.
'It's not as cheap as four or five months back at the bottom of the market, but they've got cash on the balance sheet and they aren't stressed.'
Hutchison said yesterday it had spent US$200 million buying back debt sold by Husky Oil. Mr Li owns 35.98 per cent of that company, which has operations in Canada. The debt was due in 2014 and 2019.
In October, Hutchison bought back outstanding debt totalling more than HK$2.5 billion, most of which had maturities of about one year.
'It's just continuing what they have been doing,' said Nomura Securities analyst Benjamin Lo. 'They have cash on hand, don't have liquidity problems, and it will help them reduce finance costs.'
The port-to-telecommunications conglomerate raised US$1 billion from a 10-year bond sale last month. It was the first bond Hutchison had sold since raising GBP500 million (HK$5.75 billion) in 2006. It was also the first Hong Kong firm to tap the international bond market since a US$1 billion sale of US dollar bonds by Hong Kong and China Gas in August last year.
