China's East Money Information has printed its debut US dollar bond offering after gaining decent demand from local investors on the back of its familiarity in the onshore market.
The US$300m 2% three-year Reg S senior unsecured note priced at 99.936 to yield 2.022% or Treasuries plus 110bp, inside initial price guidance of plus 160bp area.
"Not everyone knows this name and it's not a household name either but it has the brand appeal and familiarity in the onshore brokerage system, so they got what they wanted – benchmark size and putting their name out in the market," said a lead.
Headquartered in Shanghai, the guarantor is an online wealth management service provider that listed on Shenzhen's ChiNext exchange in March 2010. Eastmoney.com is the group’s core online destination, supplemented by other online sites such as Tiantian Fund and Guba.
Indirect wholly owned subsidiary Hafoo Co is the issuer and the parent is the guarantor.
S&P expects East Money will maintain "its very strong capitalization, growing brokerage and mutual fund sales business, and a strong funding and adequate liquidity profile".
The new bonds will account for about 3% of adjusted total assets at the end of June 2021, and as such will have no credit impact on the company, the rating agency said.
Some investors did express concern over a potential regulatory crackdown by the Chinese government, but were eventually convinced to participate in the trade as the company is already regulated by an onshore committee, according to the lead.
He said the investment-grade segment was also largely unaffected by the ongoing market jitters around Chinese high-yield property names triggered by the debt crisis at China Evergrande Group.
The new bonds have an expected rating of BBB– by S&P, in line with the guarantor. They were trading around reoffer on their first trading day on Thursday.
Proceeds will be used for the development of the group's overseas business.
ICBC, Bank of China, HSBC, Bank of America, Nomura and CMB International were joint global coordinators as well as joint lead managers and joint bookrunners with Bank of Communications, BOCOM International, BOSC International, China Citic Bank International, China Everbright Bank Hong Kong branch, China Minsheng Banking Corp Hong Kong branch, CMB Wing Lung Bank, Guotai Junan International, Industrial Bank Hong Kong branch, SPDB International and Standard Chartered Bank.
Shanghai Pudong Development Bank Hong Kong branch took a joint global coordinator role when the deal was priced, after being in the joint bookrunner and joint lead manager list during pricing.
ICBC (Macau) dropped out of the joint bookrunner and joint lead manager list when the deal was priced from guidance.
Updated story: adds colour and secondary trading