Hong Kong-based Asat Holdings has increased the size of a seven-year bond offering to US$150 million from $125 million due to strong demand, especially from investors in the United States, according to sources. Based on the original size, the offer was about 20 times oversubscribed. As a result, the indicated yield had also been lowered to 9.25 per cent from 9.5 per cent, the sources said. The price was expected to be fixed during the New York session late yesterday. 'The subscription rate is phenomenal ... this proves everyone is looking for high yield,' one source said. Asat, which provides semiconductor assembly and testing services, is listed on the Nasdaq Composite Index, but 43 per cent owned by QPL International Holdings, a Hong Kong-listed leadframes maker. The proceeds from the fixed-rate bond will be used to redeem about US$100 million of existing debt maturing in 2006 as well as for other capital spending. Standard & Poor's ratings services said in an earlier report that such spending would include costs associated with the company moving its operations from Hong Kong to the mainland. S&P gave the bonds a B rating, which is a non-investment grade rank. The bulk of the interest for the bond, which was marketed only in the US and Asia, reportedly came from US funds. High-yield issues overall are in strong demand among US investors as interest rates remain low and credit-spreads on US corporate bonds have tightened significantly over the past 12 months. Also, the firm's fundamentals were looking strong, one source said. While Asat has made losses for the past two years, the management has said there will be a turnaround in the quarter ending January 31 this year.