CLP Power prices $500 million 10-year bond

CLP Power Hong Kong priced a $500 million 10-year bond (rated A1 by Moody's and A by Standard and Poor's) early on Saturday morning. The senior unsecured notes were Reg-S registered and formally issued by CLP Power Hong Kong Financing with CLP Power Hong Kong as guarantor. The bonds were issued under CLP's $2.5 billion medium-term note programme and will mature on March 19, 2020.

They pay a 4.75% coupon and were re-offered at 99.077 for a yield of 4.8677%. The latter is equal to a spread of 115bp over the equivalent 10-year US Treasury yield.

Brayan Lai, a credit analyst with Credit Agricole CIB, argued that the bonds were expensive. "Hong Kong and China Gas (Towngas) 2018 was indicated around the 10-year Treasuries plus 105bp area, when CLP did their bonds," Lai said. "Adjusting the curve for an approximate 19-month duration extension from Towngas 2018 would indicate a fair-value of 130bp for CLP."