AMTD successfully leads Far East Consortium International Limited’s US$300mm 5yr senior unsecured bond offering
On 31 August 2016, AMTD acted as Joint Bookrunner and Joint Lead Manager on a successful Regulation S US$300mm 5-year senior unsecured notes offering (the “Transaction”) by Far East Consortium International Limited (35.HK) (the “Company”). In addition, AMTD also acted as a Joint Dealer on the Company’s debut US$1bn Medium Term Notes Programme establishment. Both the Transaction and the Company are unrated. The Transaction also marks the lowest coupon (and yield) achieved by an unrated Hong Kong corporate in the USD bond market this year.
Far East Consortium International Limited (35.HK) is a leading Asia Pacific conglomerate with strong asset backing. It is principally engaged in four business areas, namely; (i) property development, (ii) property investment, (iii) hotel operations and management and (iv) car park operations and facilities management. The company is one of Asia's largest hotel operator, and owner of 20 hotels. It is also one of Australia, New Zealand and Malaysia's largest car parking companies. The company is established by the renowned Hong Kong tycoons, Mr. David Chiu, former chairman of Asia Television, and listed in Hong Kong Stock Exchange in 1972. After forty years of operation, the company’s footprint covers mainland China, Hong Kong, Malaysia, Singapore, Australia, New Zealand and the United Kingdom.
This is the first time Far East Consortium International Limited issues unrated USD bond. On the back of the Company’s market recognition as the leading Asia Pacific conglomerate with diversified business segment and strong asset quality, the transaction was oversubscribed by 3 times, allowing the Company to tighten its pricing from initial price guidance of 4% area to 3.75% - 3.80% final guidance and ultimately priced at the tight-end at 3.75%. By investor type, fund managers bought 57% of the Transaction, while 23% and 20% was taken by banks and private banks, respectively. Geographically, the Transaction not only attracted Asian investors who took 81% of the Transaction, but also European investor who took the remaining 19%, as a result of the Company’s global footprint.
AMTD made significant contribution to the success of the Transaction via its superior distribution capability, by bringing in price insensitive anchor orders early in the process. As a result, AMTD once again was given the single largest allocation in the Transaction and significantly outperformed other joint bookrunners on the distribution front. AMTD continues to dominate the unrated USD bond market for Hong Kong companies, as this Transaction represents the 4th out of 5 unrated USD bond offering by Hong Kong companies that AMTD has lead-managed this year.
AMTD remains very active in the international debt capital markets and successfully completed 12 transactions so far this year. AMTD successfully led China Minsheng Investment Corp,. Ltd’s Reg S US$500mm 3Y bond offering; a US$500mm bond offering for Zhongrong International Trust, one of the largest trust companies in the PRC; a US$300mm bond offering for Yunnan Provincial Investment, the largest comprehensive holding company in the Yunnan province; a debut US$180mm bond offering for Carnival Group, China’s only publicly listed operator of large-scale integrated tourism, hospitality and retail attraction; a US$150mm bond offering for Fenghui Leasing, a leading leasing company in China; a US$362mm exchange offer and new 5-year bond offering for Sun Hung Kai & Co, the largest unlisted financial institutions in Hong Kong; Regal Hotels (78.HK)’s US$350mm bond offering; HKD500mm bond issuance for Emperor International Holdings Limited, a famous Hong Kong listed real estate company; as well as AMTD Group’s debut US$110mm bond offering, representing the first ever international USD bond offering from an unrated and unlisted financial services company from Asia.
About Far East Consortium International Limited
Far East Consortium is a leading Asia Pacific conglomerate with strong asset backing. It is principally engaged in four business areas, namely; (i) property development, (ii) property investment, (iii) hotel operations and management and (iv) car park operations and facilities management.
(i) Property development
It consists of residential project developments in Hong Kong, China, Singapore, Malaysia, Australia, and the United Kingdom. The Group has 23 pipeline projects with expected attributable gross development value of ~HK$39bn. As of July 31, 2016, the cumulative pre-sale value is around ~HK$9.8bn.
(ii) Property investment
It includes retail and office properties in Hong Kong, China, Australia and Singapore. There are a total of 13 properties valued at HK$3.3bn with a total GFA of 875,900 sq. ft.
(iii) Hotel operations and management
It is one of the largest hotel operators in Asia with 20 hotels in operation under “Dorsett, Silka and Cosmo” brandnames, with over 6,000 rooms located in Hong Kong, Malaysia, China, Singapore and the United Kingdom. It also has 12 hotels with over 3,000 rooms under development. The hotel portfolio is valued at HK$18.0bn, representing a significant HK$10.7bn revaluation surplus over book value.
(iv) Car park operations and facilities management
It manages 25 self-owned and 329 third party-owned car parks with a total of 70,989 bays across Australia, New Zealand and Malaysia under the brandname “CARE PARK”. It also has facilities management services in Australia and Malaysia with 46 existing contracts.