Sun Hung Kai Properties raised a $400 million 10-year callable note equipped with an interest rate reset similar to a floating rate note in the fifth year the first of its kind in Asia.
The innovative structure which resets at prevailing six-month dollar Libor plus a spread of 193.2bp in year five drew investors’ attention, leading to the deal pricing much tighter than expected.
The transaction also achieved a yield that was 100bp lower than where an ordinary 10-year bond would have come, say market participants. For example, Sun Hung Kai’s existing 10-year 2023s were used as comparables and were trading at a G-spread of 175bp, indicating...
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