Bright Food looks at US dollar bonds

PUBLISHED : Wednesday, 08 May, 2013, 12:00am
UPDATED : Wednesday, 08 May, 2013, 5:20am

Bright Food Group is considering selling US dollar-denominated bonds before an October deadline to repay financing for its acquisition of Weetabix.

Bright Food, based in Shanghai with operations from sugar to dairy and wine, plans to meet investors in Asia and Europe from today, according to a person familiar with the matter.

The company is due to repay a US$300 million loan in October, part of US$850 million borrowed last year to buy 60 per cent of British cereal maker Weetabix.

Korea National Oil and Yuexiu Real Estate Investment Trust were also marketing five-year debt in the US currency, sources said.

Mainland and Hong Kong issuers sold US$18.8 billion of dollar bonds to refinance debt this year, more than six times similar issuance for the same period last year, data shows.

CNOOC, China's largest offshore energy explorer, raised US$4 billion last week to refinance part of a US$6 billion short-term bank loan used to buy Canada's Nexen.

"An offshore bond gives companies the opportunity to seek alternative financing sources, longer tenors and a potentially wider investor base," said Raymond Chia, the Singapore-based deputy head of credit research for Asia fixed-income at Schroder Investment Management.

Bright Food was scheduled to meet investors in Hong Kong today, in Singapore tomorrow and in London on Friday, the person with knowledge of the matter said.

The company also signed a US$550 million term loan to fund its acquisition of Weetabix. That facility matures in October 2015 and pays a margin of 230 basis points more than the London interbank offered rate, the data shows.

Government-owned Korea National Oil is marketing five-year bonds at about 165 basis points more than similar-maturity treasuries, according to a person familiar with the matter.

Yuexiu Reit planned to sell five-year notes at a spread of about 260 basis points, a separate person said.

Separately, Tokyo Metropolitan Government has hired three banks to arrange meetings with investors in Europe and the Middle East from May 20 to discuss a possible US dollar bond sale.