Unsatisfied demand for the group's first $750 million offering and one large reverse enquiry order led PCCW-HKT to re-open its 7.75% November 2011 transaction yesterday (Monday).
Launched and closed within one day under the sole lead of JPMorgan, the BBB/Baa1-rated company raised a further $250 million in 10-year debt at an issue price of 98.583% to yield 7.958% or 315bp over Treasuries. This represented a 5bp premium to the bid level of the existing bond at the time of pricing and a 15bp premium to secondary levels at the deal's announcement earlier in the day.
The group is said to have decided to re-open the deal on Friday on the basis of reverse enquiry demand from one account, which wanted to increase its holdings and took roughly one third of the new deal. A total of about 20 investors are said to have subsequently participated overall, with an allocation split that saw roughly 60% placed in Asia, 25% in the US and 15% in Europe.
Much of the additional Asian demand was said to have come from private banking investors that had been scaled back during the original deal. In addition, about 20% of participants were said to be new to the credit.
Since its launch on November 7, PCCW s dollar debut has performed strongly in the aftermarket, trading in from 360bp over Treasuries at launch to 300bp as of yesterday morning. Bankers believe that the $1 billion deal will continue to see positive spread momentum as investors chase yield. Pricing of the new deal is also said to have been aided by the success of SingTel's landmark $2.29 billion issue of late last week, which generated $17.2 billion in demand and has thrown a positive glow over the whole Asian credit market.