SOUTH Korea's L G Electronics is seeking to raise cash through a $550 million floating-rate note (FRN), the first Hong Kong dollar FRN by a Korean corporate, but bankers in Hong Kong doubt the deal is the start of a trend.
Bankers said yesterday that arranger J P Morgan Securities Asia issued invitations to banks in South Korea and in Hong Kong to join the five-year issue.
They said the electronics manufacturer was offering a coupon of 45 basis points (0.45 percentage points) over the three-month Hong Kong interbank offered rate (HIBOR).
An FRN is an issue of debt securities or notes paying a floating rate of interest for the life of the deal.
Banks investing $60 million or more received an all-in yield of 53 basis points.
They said J P Morgan appeared to have sold the deal to L G Electronics on the strength of a subsequent currency swap into United States dollars.
'It's a more attractive way for them to raise US dollars in terms of funding costs,' said a banker.