Pacific Century CyberWorks raised US$750 million from a bond issue yesterday, leveraging on the lower interest rate environment to help refinance part of its syndicated bank loan. The issue, the firm's second successful attempt in three tries over the past four months, represents about a fifth of an outstanding US$4.7 billion loan. 'It is a good deal, but not a great deal,' said Fan Jiang, head of fixed-income research at Goldman Sachs. 'The market would have anticipated a more comprehensive financing strategy instead of the sporadic, piecemeal efforts.' CyberWorks raised US$1 billion from a private bond placement three weeks ago. It called off a US$2.5 billion jumbo bond issue in July. The latest issue, under the name PCCW Capital, which in turn was guaranteed by PCCW-HKT Telephone, started in the United States on Tuesday before the latest interest rate cut by the US Federal Reserve. Pricing of the 10-year bond issue is understood to be between 350 and 360 basis points above the US treasury bond rate. Credit agency Standard & Poor's (S&P) said CyberWorks planned to pre-pay an additional US$750 million off its bank loans by the end of this year using its cash reserves. S&P assigned a BBB rating on the latest bond while Moody's Investors Service rated it an equivalent BAA1. Analysts said although the indicated pricing of the new bond would be higher than the scrapped issue in July, and also higher than the prevailing interest rate CyberWorks was paying for its syndicated loan, it could enjoy more financial flexibility.
