Chinese issuers dominate dollar bond market
A large number of issuers from Asia, the majority Chinese, tapped bond investors on Wednesday for fresh funds.
In the last week before the US presidential election takes place on November 3, borrowers from Asia were out in droves to raise money before markets potentially turn volatile.
Among the many issuers was Chinese personal computer and tablet maker Lenovo Group, which bagged $1bn from a 3.421% 10 year transaction that was sold at reoffer on Wednesday. It paid a spread of 265bp over US Treasuries, versus guidance in the 310bp over area.
Nomura analysts wrote in a note on Wednesday that Lenovo’s bonds carry ratings for the first time, as its past deals were all unrated. The investment grade rating will improve the bonds “technical support”, they said. They recommended investors give the deal a miss if final guidance was lower than T+275bp. Lenovo ended up paying 10bp lower.
The 144A/Reg S trade, rated Baa3/BBB-/BBB-, was led by BNP Paribas, Citi, Credit Suisse, Goldman Sachs, JP Morgan and Morgan Stanley as the global co-ordinators. Crédit Agricole, DBS, Mizuho, MUFG and Société Générale were the lead managers and bookrunners.
Demand for the bond was strong, at more than $3.9bn from 200 accounts at reoffer.
Allocations across geographies were fairly even, with Asia taking 30%, Europe, the Middle East and Africa 31% and the US 39%. Asset and fund managers took 81% of the deal, private banks 6% and banks 2%.
Mega Wisdom's $400m
Mega Wisdom Global raised $400m from a bond that was guaranteed by Fortune Joy Ventures and Sino-Ocean Capital Holding. Sino-Ocean Group Holding, a Hong Kong-listed Chinese investment holding company focused on the property sector, provided a keepwell deed.
Sino-Ocean’s 364 day Reg S outing was initially marked at the 5.75% area, before being sold at par and a coupon of 5.4%. The unrated note will go towards project investment and general corporate purposes.
Haitong International, JP Morgan, HSBC, Huatai International and Standard Chartered were the global co-ordinators. Central Wealth Securities Investment, China Citic Bank International, China International Capital Corp, Citi, CMBC Capital, CMB Wing Lung Bank, Guotai Junan International and Nomura were the bookrunners and lead managers.
The bond was unrated, but keepwell provider Sino-Ocean is rated Baa3 and BBB- by Moody’s and Fitch, respectively.
Avic's $200m flies
Avic International Leasing, through issuing entity Soar Wise, raised $200m.
The perpetual non-call three year senior deal was printed at a coupon of 3.425% and sold at reoffer. In comparison, analysts at Nomura saw fair value at about 3.4% to 3.5%
The deal was initially marketed at guidance in the 3.7% area. The bond was guaranteed by the parent, an aircraft lessor under state-owned aerospace and defence company Aviation Industry Corporation of China.
The bond offers a 300bp step-up if not called at the three year mark.
Bank of China, DBS, Haitong International and Shanghai Pudong Development Bank Hong Kong branch were the global co-ordinators. China Citic Bank International, China Securities International, CMBC Capital, Guotai Junan International, Natixis, Shenwan Hongyuan HK, SPDB International and Standard Chartered were the lead managers and bookrunners.
CDB Leasing picks up $500m
China Development Bank Financial Leasing Co offered a keepwell deed and an asset purchase deed for a $500m bond raised by CDBL Funding and guaranteed by CDB Aviation Lease Finance Designated Activity Co.
The three year bond, sold on Wednesday, was priced at a coupon of 1.5%. It offers a spread of 135bp over US Treasuries, after the issuer managed to tighten guidance from the initial 170bp over area. The note yields 1.531%, having been sold at a reoffer price of 99.909.
Analysts at Nomura saw fair value at 145bp over three year US Treasuries or a Z-spread of 137bp, just outside of where the firm’s existing 3% 2023 bond was spotted at a Z-spread of 133bp.
CDB Leasing will use the money raised from the senior unsecured offering for new capital expenditure, refinancing debt, working capital and other general corporate purposes. The issuer is the leasing arm of China Development Bank.
ANZ, Bank of Communications, China Citic Bank International, CMB International, Guotai Junan International, Haitong International, ICBC Singapore, Mizuho, Natixis and Standard Chartered were the global co-ordinators.
ABC International, China Minsheng Banking Corp Hong Kong branch, China Securities International and CTBC Bank were the lead managers.
Yancoal digs up $500m
Yancoal International Resources Development Co has priced a $500m 3.5% 2023 bond at par. The deal was guaranteed by Yanzhou Coal Mining Company, rated Ba1/BB-/BB. It was initially launched at the 4% area.
The Reg S transaction will go towards repaying debt, working capital, and general corporate purposes.
CMB International, Deutsche Bank, Haitong International and Standard Chartered were the global co-ordinators. China Everbright Bank Hong Kong branch, Industrial Bank Co Hong Kong branch and Shanghai Pudong Development Bank Hong Kong branch were the bookrunners and lead managers.
The final book stood at $1.45bn from 49 accounts. Asian investors were allotted all the bonds. Banks took 94%, fund managers 5% and private banks 1%.
Yincheng lands $200m
Yincheng International Holding Co, an investment holding company with interests in property development and sale and leasing, ventured out with a 364 day note at the 13.5% area on Wednesday. It ended up raising $200m from the 12% bond, which was sold at 98.98% or a 13.125% yield.
The Reg S senior unsecured trade was to refinance debt and for general corporate purposes.
Guotai Junan International and Haitong International were the global co-ordinators, while Admiralty Harbour, CRIC Securities, China Citic Bank International, China International Capital Corp, Central Wealth Securities Investment, CMBC Capital, ICBC International and Vision Capital International Holdings were the lead managers.
Poly Property picks five year
Poly Property Group Co took $500m from an unrated five year bond on Wednesday. The 4% note, which was tightened from initial guidance of 4.5% area, was sold at par. Proceeds are to refinance debt at Poly Property, which guaranteed the bond issued by Ease Trade Global.
BOC International, Huatai International and UBS were the global co-ordinators.
ABC International, Bank of Communications, Bank of East Asia, China International Capital Corp, China Everbright Bank Hong Kong branch, China Securities International, China Citic Bank International, CMBC Capital, China Minsheng Banking Corp Hong Kong branch, Guotai Junan International, Haitong International, ICBC (Asia), Shanghai Pudong Development Bank Hong Kong branch and Silk Road International were the lead managers.
Indika taps to refi
From Indonesia, Indika Energy Capital added $225m to its coffers with a tap of its $450m 8.25% notes due in October 2025.
Parent Indika Energy offered a guarantee for the deal, as did subsidiaries Indika Inti Corpindo, Tripatra Multi Energi, Tripatra Engineering, Tripatra Engineers and Constructors and Tripatra (Singapore).
The 144A/3(c)7/Reg S transaction was opened at final guidance of par and sealed at the same level and at the same coupon of 8.25%. With the deal, the total bond size goes up to $675m.
Deutsche Bank, Mandiri Securities and Standard Chartered were the bookrunners on the notes, rated in line with the parent at Ba3/BB-. The money will help the energy company refinance debt, including fully redeeming a 2023 bond.