CLP Power lights the way

Hong Kong''s dominant electricity supplier sets an exceptionally tight benchmark for itself.

Pricing of the AA3 rated credit's new 10-year bond has not only come through its own interpolated curve, but also those of sovereign proxies MTR Corp and KCRC. Although no domestic borrower has ever priced or traded through the two train operators before, CLP Power was able to amass an order book of $2.5 billion and squeeze pricing 5bp through their theoretical secondary market trading levels.

Led by HSBC, Morgan Stanley and Salomon Smith Barney, the company launched a $300 million issue last night Wednesday on an issue price of 99.397% and semi-annual coupon of 6.236% to yield 105bp over Treasuries. Fees were an equally tight 25bp.

With books 8.3 times covered,...

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