Equity investors gave a much-needed boost to Pacific Century CyberWorks yesterday after it completed the sale of US$1 billion of bonds this month.
Shares in the dominant telecommunications operator rose 2.08 per cent to HK$2.45 on a turnover of $666.5 million, against a 1.18 per cent drop in the Hang Seng Index, although it had climbed as much as 8.33 per cent in earlier trading.
CyberWorks finalised a US$250 million, 10-year note on Monday at 315 points above United States treasuries, compared with the 360 basis points spread for $750 million in same-duration bonds issued earlier this month.
With the issue priced at 98.583, it yielded a more-expensive 7.958 per cent, compared with 7.79 per cent the last time - a reflection of a rise in treasury yields.
'That does not necessarily mean CyberWorks is paying more interest,' said Christopher Nicholas, the managing director of JP Morgan Chase Asian credit market. 'It could always swap into cheaper funding.'
Although the bond raises CyberWorks' overall interest expenses, it improves the highly geared group's financial flexibility.
'The bond issue is positive for [CyberWorks] for two reasons,' HSBC said in a research note. 'First, it allows [CyberWorks] to increase the tenure of more of its US$7.4 billion in gross debt ($4.8 billion in net debt) and lock in current low interest.
