Tingyi bond

Tingyi whets investors' appetite with $500 million debut bond

The maker of Master Kong noodles sells its first dollar bond, while Korea East-West Power, SK Innovation and Hang Lung Properties meet with investors.
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Tingyi has alliances with PepsiCo and Asahi
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<div style="text-align: left;"> Tingyi has alliances with PepsiCo and Asahi </div>

Tingyi Holding marked a first for Asia’s food and beverage sector on Wednesday night when it priced a $500 million debut dollar bond. It is also one of the few Taiwanese-owned companies to tap the dollar market — the last one being Nan Ya Plastics in 2005.

Tingyi is best known for the Master Kong instant noodle brand, which launched in 1992 and is now sold in around 75,000 retail outlets in China. The company was founded by Taiwanese businessman Wei Ing-Chou, who is chairman and chief executive, and is listed in Hong Kong. Its business, which also includes making pear juice and milk tea, is based in China and has alliances with PepsiCo and Asahi.

As Tingyi was the first Asian food and beverage company to issue in dollars, it was difficult to find a good comparable. “There weren’t exact comps. Beijing Enterprises, which has beer operations, was trading at high 200bp to 300bp, but it is a state-owned enterprise, while Tencent was at high 300bp, but that is an internet company. Then there are companies like Dr Pepper, which were trading very tight, at 100bp over Treasuries,” said one banker.

The leads — Barclays and Deutsche Bank — went out with an initial guidance of Treasuries plus 350bp and the bonds priced at Treasuries plus 325bp. Investors welcomed Tingyi’s debut, judging by the $3.25 billion order book.

About 75% of the bonds were allocated to Asian investors, European investors took 15% and offshore US investors 10%. There was a meaningful onshore bid from Taiwanese investors. The bonds, which are rated Baa1/BBB+, went on to trade tighter in secondary and were quoted at Treasuries plus 317bp/315bp on Thursday morning.

Elsewhere, a number of companies are on the roads, though investors are nervously eyeing the situation in Europe and, in particular, the upcoming Greece election. The market is still open, albeit to investment-grade credits.

“Deals are still getting printed with strong order books, which suggests that there is still liquidity,” said one regional syndicate banker. “It is mid-June, not the end of the year, and investors need to put money at work.”

A number of companies are on the roads. Korea East-West Power has mandated Bank of America Merrill Lynch, Citi, HSBC, Morgan Stanley and UBS to arrange a series of investor meetings starting during the week of June 18. Also, Korean energy and petrochemical company SK Innovation has mandated Bank of America Merrill Lynch, BNP Paribas, Citi and Morgan Stanley for a potential offering.

Elsewhere, Hong Kong property company Hang Lung Properties has mandated Bank of America Merrill Lynch and HSBC to arrange investor meetings that started on June 13.

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