Conglomerate considers retail issue in wake of successful government offering Conglomerate Swire Pacific is planning to raise up to US$200 million by issuing Hong Kong dollar-denominated bonds in the third quarter of this year. The company is also considering its first retail bond offering, but no specifics have been decided. 'We have been in talks with banks for a retail bond offering for a few months, but nothing concrete has come up yet,' a Swire spokeswoman said. If launched, it would be the third retail bond issue from a Hong Kong-listed company after offerings by Wharf (Holdings) in 2002 and Cheung Kong (Holdings) in October last year. However, some market observers said Swire - a frequent issuer to institutional investors - had no reason to spend extra to fulfil the additional disclosure requirements a retail offering entailed. 'It could easily raise money from institutional investors,' one retail products specialist said. Others saw value in the offer. The success of the retail tranches of the government's bond offering this year proved that local interest ran deep, which would lead to more corporate offerings, said Brian Yiu, the head of debt capital markets at Standard Chartered. Funding costs for a retail debt offering were usually lower than those offered to institutional investors, said another debt arranger, adding that the yield could range between 10 and 50 basis points. Swire is believed to have designated the proceeds from the debt issue for investment projects. The property investor has recently been active in reinvesting in property projects such as Taikoo Place in Quarry Bay and Guangzhou Taikoo Hui complex. It is also thought that the company needs funds to repay a HK$2 billion bond due next month, but the Swire spokeswoman said the company had other alternatives. 'We are also in talks with banks to arrange bilateral loans for the bond repayment,' she said. Global outsourcing agent Li & Fung and Cathay Pacific Airways are also eyeing the bond market for funds, given interest rates remain low despite two recent interest-rate rises in the United States. Li & Fung is planning to raise about US$300 million from an offshore bond issue in the next few months to fund acquisitions, according to debt markets newsletter Basis Point. On Thursday the company was granted its first A3 credit rating from Moody's Investors Service and A-minus from Standard & Poor's. Sources said Citigroup was the rating adviser for the exporter. Sources said Cathay Pacific was looking to tap about US$150 million for fleet expansion through a Singapore-dollar note, with Standard Chartered as the arranger.