CNOOC refrains from pricing dual-tranche bond too aggressively

The 10- and 30-year bonds attract $5.7 billion of demand as investors are drawn to the rarity of its double-A rating.

Being a rare double-A rated issuer out of China, CNOOC Limited as expected attracted a lot of demand for its $2 billion dual-tranche bond, which also tapped into the current investor appetite for long-dated paper. Wanting to take advantage of the latter, but at the same time keep its funding costs down, the Hong Kong-listed offshore oil producer decided to issue $1.5 billion of 10-year bonds due 2021 and $500 million of 30-year bonds due 2041.

The desired split wasn’t disclosed during the marketing, although one banker said the company did have a preference for 10-year paper since it will not swap the proceeds and therefore will have to deal with the outright cost.

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