Chalco steps up with $500m perpetual

The state-owned aluminum giant pulls off an aggressive price after including a coupon step in its perpetual.

State-owned aluminum giant Chalco, rated BBBBBB-, raised $500 million of capital this week, selling a perpetual bond that becomes callable after five years.

The company became only the latest Asian corporation to issue perpetual bonds amid the tight interest rate environment.

The bond was priced at par to yield 4.25%, at the tight end of final guidance of between 4.25% and 4.375% and inside initial price talk circulated of the 4.75% area. The pricing of the deal gave a clear demonstration of how structural differences in particular, those that change an issuer's incentive to call a bond can have a dramatic impact on pricing....

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