Perpetuals: aggressive terms don't scare investors

Even the prospect of a 20-year wait for a step-up, investors are ready to take the credit risk in one Hong Kong-listed leasing company. It reflects strong appetite for yield.

It's been a record year for perpetual bonds across Asia Pacific, as investors shrug off default risk and the prospect of interest rate rises to snap up bonds with no maturity date.

In one of the most eye-catching examples of the trend yet, Far East Horizon, a China-based financial leasing company, sold its second perpetual bond in less six months on Monday. What's notable is that the bond structure gives no incentive to the company to buy back the bond for 20 years.

Priced to yield 5.6%, the $400 million Reg S transaction was seen by some fixed-income investors as the embodiment of a rising trend...

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