Lenovo, the world's largest supplier of personal computers, plans to make its first foray in the bond market this year, joining other major Chinese companies raising fresh funds from US currency debt offerings. In the company's filing with the Hong Kong stock exchange yesterday, Lenovo chairman and chief executive Yang Yuanqing said net proceeds from the proposed bond issue would be used "for general corporate purposes, including working capital, and to fund any acquisition activities". The size and price of the note issue will be determined by a book-building process conducted by Citigroup, the global co-ordinator appointed by Lenovo, and the 12 banks named as joint lead managers and joint bookrunners. My guess is they are looking at … a series of smaller [smartphone] deals ALBERTO MOEL, BERNSTEIN RESEARCH Lenovo, which has a total of US$8.1 billion in available credit facilities, announced in January its two-biggest corporate acquisitions: a US$2.91 billion deal for smartphone maker Motorola Mobility and the US$2.3 billion purchase of International Business Machines' low-end server business. Alberto Moel, a senior analyst at Bernstein Research, said the proceeds from Lenovo's bond sale would not likely be used by management to pay for existing acquisitions. "Since the Motorola announcement, they've bought a patent portfolio from NEC and another one from Unwired Planet. So my guess is that they are looking at other things to acquire, maybe a series of smaller deals to help them in their smartphone business," Moel said. The time, however, is ripe for Lenovo to sell bonds. Chinese issuers are paying the least for US dollar debt since January 23 after the average yield premium dropped to 348.7 basis points on Wednesday, according to JP Morgan Chase indices. "We're just coming off the Easter break and markets are generally strong. Demand is very high. Investors have cash to put to work," said Harsh Agarwal, the Singapore-based head of Asia credit research at Deutsche Bank. Deutsche Bank is the fourth-biggest arranger of dollar notes in Asia this year, with a 7.7 per cent market share. CNOOC, the mainland's biggest offshore oil and gas producer, yesterday sold its US$4 billion offering in three parts: US$1.25 billion of three-year notes, US$2.25 billion of 10-year bonds and US$500 million of 30-year debt. That followed a dual-tranche bond issue worth US$2.5 billion from Tencent, Asia's largest listed internet company. Its offering comprised US$500 million of three-year notes and US$2 billion of five-year bonds. Investors can expect at least US$10 billion of issuance from Asia, excluding Japan, in the next two to three weeks, 66 per cent more than in all of March, according to Agarwal. Lenovo said its proposed bonds would be offered to professional and institutional investors, which Tencent's notes programme had also established. Ricky Lai, an analyst at Guotai Junan International, said Lenovo could consider adopting Tencent's approach of "making strategic investments in targeted companies, instead of doing an outright purchase of businesses". Lenovo's share price slipped 0.68 per cent to close at HK$8.80 yesterday.