Beijing Properties, a Hong Kong-listed developer of warehouses and logistics centres, returned to the international bond market on Wednesday, raising $300 million through the sale of a three-year bullet.
The Hong Kong-listed group, which boasts Amazon and JD.com among its clients, managed to generate more than $2.6 billion of demand for its deal at the peak, although the final order book had fallen to $1.8 billion after a cut in price guidance. Some 60 accounts participated in the transaction, according to bankers running the deal.
Beijing Properties is partly owned by Beijing Enterprises Group (BEG), a state-owned investment conglomerate that controls eight Hong Kong-listed companies and two mainland-listed companies, including China Gas and Yanjing Beer.
According to a marketing document, a wholly-owned real estate unit of BEG provided “letter of comfort” to both Beijing Properties and the issuance vehicle, Keen Idea Global. The unit must own at least 40% of Beijing Properties and keep both entities solvent at all times.
Bankers approached investors with initial guidance of "the 5% area" on Wednesday morning, before tightening the Reg-S deal to 4.625% the number. The March 2020 bond ended up being priced at 99.307 with a coupon of 4.375%, according to a term sheet seen by FinanceAsia.
In the secondary market, the unrated bond was trading above its reoffer at 99.70 to yield 4.483%, according to a syndicate banker.
The closest comparable was Beijing Properties' outstanding November 2018 5.5% $300 million bond, which was trading at a bid price of 102.25 to yield 4.12%. Fair value for the new deal should have been around 4.6% after the curve extension, according to syndicate bankers’ estimates.
“We think the new deal should add about 50 basis points on top of the outstanding 2018 bond,” a syndicate banker said.
The company plans to use the proceeds of the bond for general working capital, corporate purposes and capital expenditure.
Asian investors took 89% of the deal, with the remaining 11% going to investors in Europe. By investor type, funds — including insurers — took 58%, private banks 28%, banks 6% and corporates and other investors the remaining 8%.
In 2014, Beijing Properties raised Rmb490 million in convertible bonds from private-equity investor PAG, which can exchange the bonds for about 12.4% of the company's stock.
The bookrunners of the latest deal were Credit Suisse, DBS, Guotai Junan International.
