Hong Kong's Mass Transit Railway Corporation (MTR) has become the latest big issuer to try its hand in the local debt market this year, with a HK$2.35 billion ($300 million) deal via HSBC.
The deal was split into three fixed rate tranches with maturities of three, five and seven years. The HK$850 million three-year piece carries an annual coupon of 5.35%, the HK$1 billion five-year notes came in at 5.83% and the HK$500 million seven-year bonds at 6.12%.
All three tranches - sold in denominations of HK$1,000,000 - priced at par and will pay investors on a quarterly basis.
A syndicate official at the bank comments that the bonds (85% sold at the time of writing) were placed with asset managers, insurance companies and government-related funds. "It priced pretty much in line with the Airport Authority which came last week," the official says. "The same execution logic applies to both deals. Taking into account the credit quality of the issuer, it offers good value compared with similarly rated institutions."
Although the company has done a number of small private placements from its note issuance program, the deal marks MTR's first publicly placed bond offering since it hit the international market last November with a $600 million issue via Goldman Sachs, HSBC and Merrill Lynch. The 10-year transaction was the winner of the best investment grade bond deal for 2000 in FinanceAsia's Achievement Awards.
