Nan Fung prompts perp pile up

Hong Kong property developer's deal sees sector re-price. Is this the end of the road for fixed-for-life perpetuals?

A $500 million fixed-for-life perpetual by Nan Fung International Holdings dropped sharply after it began trading on Tuesday in a sign investors may be starting to question the wisdom of structures, which leave them heavily exposed to duration risk. 

The Hong Kong property developer’s senior perpetual non-call three-year offering was priced at par on a coupon of 5.5%, but immediately dropped one point when it opened for trading.

In turn, it also dragged down other recent senior fixed-for-life perpetuals by Cheung Kong Properties and Sun Hung Kai SHK, which are both nearly a point-and-a-half below their mid-May issue prices.

Nan Fung's...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222