Asia Pacific

The bull run that saw Asian markets surge since the global crisis came to a grinding halt in the first half of the year amid fears around overstretched valuations – and inflation. Whatever the long-term story, investors are hunkering down for a turbulent ride

Macau casino operator Melco Crown Entertainment is planning to make its debut in the fast-growing dim sum bond market, becoming the first Macanese borrower to test demand for offshore renminbi bonds this year — and only the second ever, after local rival Galaxy Entertainment sold its own deal at the end of last year.

United Overseas Bank’s Sydney branch launched and priced the Singaporean lender’s inaugural Australian dollar deal on Wednesday — a A$350m three year FRN that beat market expectations. Pricing was revised downwards twice during the deal’s execution and lead managers Australia and New Zealand Banking Group, HSBC, Macquarie Bank and UOB took A$1bn worth of orders.

Guangzhou R&F Properties was preparing to price a dual tranche renminbi and dollar bond on Wednesday evening after sounding out investors in Asia and Europe.

Offshore renminbi bonds continued to find appetite this week as investors rushed to put their deposits into high yielding securities. Guangzhou R&F Properties pitched investors with the largest deal, which featured renminbi and dollar tranches (see separate story), but several other issuers sought investors for their own pure renminbi deals.

Hong Kong & China Gas, the utility company better known as Towngas, made its debut in the dim sum bond market last week, selling a Rmb1bn ($152.7m) deal. The company is by far the most prominent Hong Kong corporation to sell bonds in the market, and the record-low coupon it paid for the five year issue will set a benchmark for other borrowers.

Unilever demonstrated the razor-tight pricing achievable in Hong Kong’s renminbi bond market this week, paying only 1.15% for three year money. But some bankers think the investor base is starting to mature — and that the growing supply is encouraging buyers to differentiate more than ever between credits.

Mitsubishi UFJ Lease and Finance became only the second-ever Japanese borrower to sell dim sum bonds this week, when it issued a Rmb200m ($30.5m) deal. The bond drew a strong response from investors, showing that demand for Japanese credits has not wavered despite the earthquake that struck the country three weeks ago.