Deals of the year - Top quality issuers succeed in demanding markets
Hutchison Whampoa likes historic moments. In 1997 the Hong Kong conglomerate made its debut on the Eurobond market with a $2 billion four-tranche transaction, less than a month after the territory's sovereignty was returned to the People's Republic of China. It was the largest corporate bond from a non-US company in any currency and the largest Asian 144a eligible deal.
This year Hutchison struck again just two months after the introduction of the euro with its first deal denominated in the new currency: a blowout €500 million ($529 million), which is still the largest Asian transaction in the new currency.
Ironically, it might never have happened. The company was planning to do a yankee issue. It had mandated Goldman Sachs to test investor sentiment and put its 144a documentation in place. But despite Hutchison's highly successful HK$1.5 billion ($193 million) deal in January led by HSBC, American investors' sentiment remained lukewarm. They still required a 300bp spread over treasuries for the 10-year paper: an Asian premium that Hutchison was not prepared to pay given that its credit quality hadn't deteriorated.
So when Ralf Berlowitz, head of bond syndicate at Deutsche Bank in Frankfurt, led its delegation to Hong Kong to meet Hutchison's officials, he couldn't have found a more receptive environment.