Equity Issue: WuXi XDC’s HK$4.06bn HK IPO

The conglomerate, rated A2/A/A–, is one of Hong Kong’s largest corporations and has been a benchmark issuer for years. But CK Hutchison had not visited the G3 market since it sold US dollar and euro bonds in 2021. The euro bond in November 2021 was its debut green sale, but paid a double-digit concession and demand was muted. Despite the challenges the 2023 market brought, CK Hutchison found an opening in the second quarter. Even though global markets were shaky in the wake of March’s bank failures and continued interest rate volatility, Hong...

The bond exemplified a key trend in Asia, and in particular India, in 2023 – the exponential growth of private credit. Taxation changes in India made mutual fund investments less attractive and prompted a hunt for yield. That led investors to high-yielding rupee bonds and private credit transactions. Goswami Infratech’s bond was far from a simple high-yield note, and it was in the works for four months before launch. The April 2026s pay no coupon during the life of the bond but accrue interest at 18.75% compounded annually to fund a...

When India’s ReNew Energy Global hit the market with a US$400m 3.25-year non-call 2.25 green bond in April, Indian borrowers were still facing increased scrutiny as Adani Group’s US dollar bonds sold off following the publication of short-seller Hindenburg Research’s report. Globally, markets were dealing with the knock-on effects of bank failures and investors were generally nervous, making them reluctant to take exposure to high-yield paper. These difficulties made fair value for ReNew’s new notes hard to pin down. The company’s previous note...

The fact that the borrowing crossed the finish line comfortably despite that backdrop and deteriorating market conditions is impressive. In the process, the financing achieved some milestones, including becoming the first TLB to include a Hong Kong dollar-denominated tranche and the largest such multi-currency financing for an Asian credit. Split into a US$1.66bn incremental covenant-lite TLB and a US$220m add-on revolving credit facility, the financing started taking shape after private equity giant Baring Private Equity Asia (now EQT...

LG Chem, an investment-grade issuer, is a regular in the US dollar bond market, but had not visited the equity-linked market since 2018. As US dollar rates rose, an EB issue looked attractive. The deal also offered LG Chem a way to monetise a 1.57% stake in LG Energy at a premium amid volatile markets, instead of selling the shares via a block trade at a wide discount. The dual tranche EB offering launched in July is the largest international EB ever in Asia Pacific and the biggest equity-linked transaction from South Korea. The deal...

The transaction was one of the most creative when it came to meeting not only the needs of the issuer, but also those of investors. Aware that there was plenty of investor demand at the short end, SK Hynix, rated Baa2/BBB– (Moody’s/S&P), kept its US$750m 6.25% three-year bond conventional, and it landed at Treasuries plus 240bp. SK Hynix tied a green label to its US$750m 6.5% 10-year tranche to draw demand to the long end, making it the trade’s most popular portion. Orders reached US$5.8bn from 321 accounts, and the tranche priced at Treasuries...

The SLL was the first to include carbon usage effectiveness as a key performance indicator and the first known financing by a data centre company to incorporate a gender pay equity target. The other three KPIs are operating power and water usage effectiveness, and gender diversity. The financing set an industry benchmark for its transparency, accountability, and ambition, having incorporated all three key sustainability topics of power, water and greenhouse gas emissions, which fits in with the company’s broader sustainability strategy...

The US$404.78m transaction was years in the making, as the government-owned entity spent time building its internal skillset and preparing for a structured trade that could bring new investors to project finance and bridge the funding gap for infrastructure in Asia. HKMC, which buys mortgages from banks to help them free up liquidity, began eyeing the potential of the new product back in 2018 when it established its infrastructure financing and securitisation division, following in the footsteps of now-established borrower Bayfront...