Sun Hung Kai launches landmark $400m bond

The property group sold Asia’s first callable bond with a floating rate reset, addressing investor concerns in a rising interest rate environment.

Sun Hung Kai Properties raised a $400 million 10-year callable note equipped with an interest rate reset similar to a floating rate note in the fifth year the first of its kind in Asia.

The innovative structure which resets at prevailing six-month dollar Libor plus a spread of 193.2bp in year five drew investors’ attention, leading to the deal pricing much tighter than expected.

The transaction also achieved a yield that was 100bp lower than where an ordinary 10-year bond would have come, say market participants. For example, Sun Hung Kai’s existing 10-year 2023s were used as comparables and were trading at a G-spread of 175bp, indicating...

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