Alibaba smashes Asian record

Fri Nov 21, 2014 11:27pm IST

By Danielle Robinson and Liangting TuNEW YORK, Nov 21 (IFR) – Alibaba Group wowed the markets on Thursday with the largest US dollar bond sale on record from an Asian company, pricing its US$8bn debut at levels even tighter than some of the world’s best-known issuers.The Chinese e-commerce giant, which listed in New York in September through a US$25bn IPO, amassed more than US$55bn of orders for the long-awaited six-tranche deal, one of the world’s largest investment-grade bonds of the year.The narrow pricing marked a milestone for a Chinese company, comfortably beating higher-rated state-owned issuers and offering investors no compensation for the perceived risks associated with Chinese investments.”The pricing on Alibaba’s bonds did not reflect a China risk premium in our view, and was priced more like a US credit, given the solid demand from the US investor base and hype around the IPO,” said Raymond Lee, a Sydney-based portfolio manager at Kapstream Capital, one of Australia’s largest fixed-income funds.Alibaba, rated A1/A+/A+, priced US$1bn of 1.625% three-year fixed-rate notes at 70bp over Treasuries, almost 40bp inside where state-owned China National Petroleum Corp (Aa3/AA-/A+) had sold three-year bonds just two days earlier.

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