China’s biggest chip maker in US$800m unrated notes issue

Tsinghua Unigroup has been on an international buying spree

PUBLISHED : Friday, 04 December, 2015, 5:45pm
UPDATED : Friday, 04 December, 2015, 5:45pm

Tsinghua Unigroup, the Chinese state-owned technology giant, has issued US$800 million in dual-tranche senior notes, the firm’s first US dollar-denominated issuance as it looks to invest billions in an effort to become a top global player in the microchip market.

The coupon rate for the three-year notes is 5.25 per cent and 6 per cent for the five-year note.

Credit Suisse was the sole bookrunner for the unrated deal and said that 94 per cent of both tranches were bought up by investors in Asia. The deal was oversubscribed by 3.75 times.

Tsinghua, China’s largest chip maker, said the proceeds of the issuance would be used for general corporate purposes. The deal comes not long after an announcement that the group plans to invest US$47 billion over the next five years in the hopes of becoming the world’s third-largest chip maker behind Intel and Samsung Electronics.

Tsinghua Holdings, the investment arm of Tsinghua University, hold a 51 per cent stake in Unigroup.

The company’s investment plans were reported by Reuters last month.

Tsinghua Unigroup has also gone on an international buying spree recently. In October, the firm took a 25 per cent stake worth US$600 million in Taiwanese chip testing company Powertech Technology.

In August, it made an informal US$23­ billion takeover offer for US giant Micron Technology that was rejected by the Idaho-based chipmaker amid concerns a deal might endanger America’s national security.

Credit Suisse said the dual-tranche notes were the largest unrated issuance from a Chinese state-owned firm to date.