Bloomberg News

Swire Pacific, Sun Hung Kai Bonds Rise in First Day of Trading

February 22, 2012

Feb. 22 (Bloomberg) -- Swire Pacific Ltd.’s first dollar- denominated bonds in more than two years rose in Asian trading after investors offered to buy more than ten times the notes on offer.

Swire, which owns Hong Kong developer Swire Properties Ltd., sold $500 million of ten-year notes yesterday priced to yield 260 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg. The spread narrowed to 249 basis points, or 2.49 percentage points, as of 3:28 p.m. in Hong Kong, prices from BNP Paribas SA show. Sun Hung Kai Properties Ltd. also gained after the real-estate company increased the size of an existing issue.

“The syndicated loan market was quite tight in 2011, so developers such as Swire and Sun Hung Kai have been opportunistic,” Agnes Wong, a credit strategist at Nomura Holdings Inc. said by telephone today from Hong Kong. “They want to be well prepared for refinancing and are probably looking for land supply in the future. We expect to see a few more names.”

Hong Kong developers sold $7.28 billion of debt this year, the busiest quarter on record, according to data compiled by Bloomberg. Lending to the city’s real estate companies slumped in the second half to the lowest in two years amid increased demand for loans from Chinese corporates.

Swire Pacific sold debt as Sun Hung Kai added $400 million to its 4.5 percent 2022 notes. Shui On Land Ltd. plans to sell more of its 9.75 percent bonds due 2015, it said in a statement to the Hong Kong stock exchange today.

Investor Demand

The premium on Sun Hung Kai’s 4.5 percent 2022 notes tightened to 262 basis points as of 3:29 p.m., Credit Agricole SA prices show. It sold $400 million more of the bonds at a spread of 270 basis points yesterday.

Swire Pacific last sold dollar notes in August 2009, when it raised $500 million from a 5.5 percent bond due August 2019, data compiled by Bloomberg show.

The company got more than $5 billion of orders from 280 accounts for its latest sale, a quarter of which came from Europe, according to a person familiar with the matter. Funds bought more than half the deal, with banks taking almost 20 percent and private banks and insurers picking up 10 percent each, the person said, asking not to be identified because the details are private.

Sun Hung Kai’s sale was more than five times oversubscribed, with 88 percent allocated to accounts in Asia, a person with knowledge of the sale said, asking not to be named for confidentiality reasons. Funds took more than 50 percent of the trade and insurers bought almost 25 percent, the person said.

--Editors: Jonathan Annells, Beth Thomas

To contact the reporter on this story: Rachel Evans in Hong Kong at revans43@bloomberg.net

To contact the editor responsible for this story: Shelley Smith at ssmith118@bloomberg.net


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