Hana Bank and Uniflora postpone bond deals

Hana Bank postpones its bond sale due to price sensitivity, while Uniflora gets considerable pushback from investors questioning its links to Davomas.

Amid volatile markets, Korean lender Hana Bank yesterday decided to postpone its 5.5-year dollar benchmark as investors turned risk averse after Standard & Poor’s cut its outlook on the US from stable to negative.

Hana Bank had earlier gone out with a price whisper at Treasuries plus low-200bp, but, according to a banker, postponed the deal due to concerns over pricing. However, market participants expect the borrower could revisit the bond markets after the Easter holiday.

The Korean bank had ended global roadshows covering the US, London, Singapore and Hong Kong on April 7. Barclays Capital, Citi, Hana Daetoo Securities, HSBC and Standard Chartered were mandated on the deal.

On Monday, Indonesian cocoa butter and powder processor Uniflora Prima also postponed its dollar bond. The five-year non-call-three was expected to raise about $200 million to $300 million. ING was the sole bookrunner.

Uniflora had received considerable pushback from investors who questioned its ties to Indonesian cocoa butter and powder exporter Davomas Abadi. The latter has twice suspended payment of its debts and sought protection from creditors in the Indonesian courts. It has also defaulted on interest payments under its 2011 bonds.

Uniflora had planned to use the proceeds of the bond issue to fund the acquisition of shares in Davomas and to redeem Davomas’s 2011 and 2014 bonds, as well as to fund capital expenditure. Uniflora’s current president director, Johanas Herkiamto, previously worked for Davomas.

In her research note on April 8, Nomura analyst Annisa Lee noted that while Uniflora is owned by Hidayat Latif and Rudiono Tantowijaya, "it remains uncertain as to whether and how Uniflora is linked to Davomas". She added that both companies have the same set of customers and use the same auditor. Uniflora’s current president director, Johanas Herkiamto, also previously worked for Davomas.

The company told investors on Monday that it was “evaluating the transaction based on the feedback provided by investors”, and was “grateful for the patience displayed by investors while they review all financing options”.

It also added that it “looks forward to re-engaging the investor community in the near future”.

¬ Haymarket Media Limited. All rights reserved.
Share our publication on social media
Share our publication on social media