Shui On’s offshore synthetic bond explained

Author: | Published: 18 Feb 2011

Shui On Development’s second round of high yield bonds feature carve-out baskets on its covenant package – a sign that covenants are becoming more issuer-friendly on the burgeoning structure.

The company’s debut issue was launched in December 2010, when it became the first ever synthetic high yield renminbi bond to be sold in an offshore public market and devised the now highly coveted structure.

The Rmb3.5 billion ($531 million), four-year renminbi denominated and US dollar settled senior notes will have an annual interest rate of 7.625%. Net proceeds amount to approximately $520 million, which will be invested in temporary cash investments to fund capital expenditures or repay existing indebtedness. The Hong Kong-listed company has sought application for the notes on the Singapore Securities Exchange....