Li & Fung taps perpetual as it eyes acquisitions

Li & Fung's $500 million perpetual suggests a large acquisition is ahead and reduces the likelihood of a near-term equity raising, analysts say.
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Private banks provided the bulk of demand for Li & Fung's perpetual
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<div style="text-align: left;"> Private banks provided the bulk of demand for Li & Fung's perpetual </div>

Hong Kong-listed garment exporter Li Fung raised $500 million through a perpetual bond late last week which some believe signals that a big acquisition is imminent and reduces the likelihood of Li Fung tapping the equity market in the near term.

Blue-chip name Li Fung is controlled by brothers William and Victor Fung, and supplies to major US retailers such as Wal-Mart. The company has been on the acquisition path for some time and a perpetual bond makes sense as its balance sheet looks stretched thanks to rising debt levels. Li Fung is rated A3 by Moody’s and A- by Standard Poor’s and its hybrid will receive 50% equity credit...

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