CLP Power $300m bond oversubscribed

The transaction comes as Hong Kong’s biggest energy operator strives to boost partnerships in the fields of nuclear and renewables as well as shore up its Australian operations.

CLP Power Hong Kong yesterday announced that its wholly-owned subsidiary CLP Power Hong Kong Financing had successfully priced $300 million 3.125 percent senior unsecured notes due 2025 under its $4.5 billion Medium Term Note Programme.

Whereas the company declined to comment on where the funds raised would be allocated, the transaction comes at a time when it seeks to implement several shifts in its strategy. It indicated in December last year that it would pursue further rapprochements with mainland China’s key industry players in the field of nuclear power thanks to existing long-term partnerships it holds with China Southern Power Grid and China General Nuclear Power Corporation, as well as deepening its market integration in Indian and Chinese renewables and coal. It is also working to restore value in its Australian operations, which have suffered from overcapacity in the energy generation sector, falling wholesale prices, and regulatory uncertainty with regards to renewables.

“We have seen unprecedented decreases in demand for electricity in mature economies, dramatic volatility in fuel markets, a structural shift in global economic growth towards Asia, tightening environmental regulation in our key markets and continued policy uncertainty on climate change”, said Michael Kadoorie, the company's chairman.

The notes will be unconditionally and irrevocably guaranteed by CLP Power, rated A1 and A by Moody’s and Standard and Poor’s, respectively, and listed on the Hong Kong Stock Exchange.

The notes have been priced at 125 basis points over the 10-year U.S. Treasury Note to yield 3.176 percent. A coupon of 3.125 percent will be payable semi-annually in arrear.

The notes are expected to be issued on 6 May 2015, subject to the satisfaction of certain conditions precedent, and will be redeemed at par on 6 May 2025. They were more than nine times over-subscribed with over$2.8 billion in orders from investors based in Asia and Europe, according to a company statement.

The Joint Bookrunners are ANZ, Crédit Agricole CIB, HSBC, Mizuho Securities and Standard Chartered Hong Kong.