A Hong Kong Conglomerate, New World Development woos ESG investors with a desirable new issue premium for as much as $700m. This trade would be in two splitting forms of notes. The first is New World Development selling a $200m 5.875% five-year social bond at 99.808. The yield expectation is 5.92%, or 290bp Treasuries. The price of the deal was 325bp in the initial guidance area.
The second note is New World Development Finance. It purchased a $500m pn 6.15% perpetual non-call three-year green bond. The price is going to be at or 320.1bp. The initial guidance area was at 6.5% area. This perp has around 300bp as the non call after three-years. Bankers argue that these two separated deals gain a guarantee from the parent because they are the same issuer. The medium-term note program is the issuance of the senior deal. Meanwhile, the perpetual note has a standalone basis issuance.
The conglomerate perennially opened a tender offer on Wednesday. The company utilizes the liability management exercise to gain investors attention on the new notes. Thus, the company offered to repurchase its 2022 bond for $950m. Then it has the guarantee from the parent. The company would purchase $1.005 per $1.000 in the nominal amount for the notes. This tender would expire by June 17.
A banker argued that this kind of tender was actually a regular liability.
Thus, the maturity would be the year-end so that the issuers could attract some investors. The banker added that New World Development could gain the benefit from some investors by rolling over the old notes. This is for the new bond. Last year, the firm took the same approach. It purchased a $1.2bn perpetual non-call seven-year bond with a tender offer. The key success for this scenario is that it could attract large ESG investors.