Guangdong Investment CB

Exchangeable into Guangdong Investment defies tough market

Issued by an investment company owned by the Guangdong provincial government, the deal attracts good demand from investors despite the fact that the bonds cannot be exchanged for the first two years.

Ignoring the challenging market environment, investment holding company GDH Limited last night raised $250 million from the sale of bonds that are exchangeable into its Hong Kong-listed subsidiary, Guangdong Investment.

The deal came as Guangdong Investment’s share price has risen 8.9% during the past couple of weeks, bringing it close the 2011 high of HK$4.31 that it reached in January. The company clearly saw this as an opportunity to raise some cash, but the fact that it chose to do a deal at a time when widespread concerns about growth is putting pressure on equity markets around the world European markets were down a couple of points during the...

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