The Baa3/BBB- rated group closed the $300 million seven-year deal on the back of a $1.2 billion order book. The deal further established CharteredÆs credit curve. Last year the company issued five-year and 10-year notes in its debut in the international capital markets.
The deal was priced at 157bp over Treasuries to yield 6.25% based on a re-offer price of 99.053% and coupon of 6.25%. This equates to a mid-swap spread of 109bp.
At these levels the deal prices in the middle of its five/ten year curve. Chartered SemiÆs $375 million five year deal originally priced at 190bp over Treasuries to yield 6.009% based on a re-offer price of 98.896% and coupon of 5.75% or 146bp over Libor. That deal is now trading around 133bp over Treasuries.
The 10-year tranche was sized at $250 million and priced at 230bp over Treasuries to yield 6.572% based on a re-offer price of 98.573% and coupon of 6.375%. This equates to a Libor spread of 186bp. Currently that deal is trading at 175bp over Treasuries.
The deal attracted 75 investors, with total demand of $1.2 billion.
By geography, the deal saw 45% placed into the US, 28% into Asia and 27% into Europe. By investor type, 52% was allocated to asset managers, 33% to banks, 10% to insurance companies and pension funds and 5% to private banks.
The distribution statistics reveal a very strong tilt towards the US where investors have much greater experience with a credit from the tech sector.
Typically US investors will demand a fairly high premium for Asian deals relative to domestic comparables. But in this instance they seem to have been swayed by Temasek's halo effect and strong market momentum. The triple-A rated Singapore state-owned investment company ultimately owns 60% of Chartered.
¬ Haymarket Media Limited. All rights reserved.
