AMTD Group successfully launchs its US$200mm senior perpetual bond offering

On 8 June 2017, AMTD Group Company Limited ( “AMTD”) announced the successful issuance of a Reg S US$200mm senior perpetual bond offering (the “Offering”). The Offering is a drawdown under AMTD’s updated US$ 1bn Medium Term Note programme ( “MTN programme”) , representing a pioneer transaction because it is the first Hong Kong non-bank financial institution which is unrated, unsecured, non-listed to issue a publicly tradable senior perpetual bond on the back of its strong credit profile. The senior perpetual bond was priced on 8 June and will be listed on the Hong Kong Stock Exchange. Following the successful issuance of its US$ 160mm 3-year USD bond in 2016, AMTD has once again achieved another landmark in the international debt capital markets. In addition, the Offering also represents one of the few financial institutions which has successfully completed a well-received senior perpetual bond offering since the beginning of a rate hiking cycle by the Fed and the downgrade of China and Hong Kong’s sovereign ratings.

The senior perpetual bond is unrated and unsecured. Given its strong credit profile and growth prospects, AMTD Group is able to break market norms and become the first non-listed and non-bank financial institution to complete a HKSE-listed senior perpetual bond, which is 100% recorded as equity in its financial statements. In 2016, AMTD successfully completed its debut HKSE-listed USD bond offering, which represents the first ever and the largest international USD bond offering from an unrated and unlisted financial services company in Hong Kong. This is also the second time AMTD has achieved overwhelming success in the international debt capital markets, since the issuance of the aforementioned 3-year USD bond, reflecting the international capital market’s confidence and recognition on AMTD's future business prospects.

Benefiting from AMTD Group’s strong balance sheet, solid credit profile, leading market position, professional and prudent compliance and risk management system, as well as strong financial performance, the Offering was well-received by the capital market, despite the recent market volatility arising from headwinds including the downgrade of the sovereign ratings of China and Hong Kong, the expectation of a rate hike in the upcoming FOMC meeting in June, as well as political risks arising from the UK election and the increasing tension in the diplomatic relationship of Qatar and the Gulf region. Led by Chairman and President Calvin Choi, the management team conducted a 3-day roadshow in Hong Kong and Singapore and met with over 100 institutional investors prior to the official announcement of the Offering. On the back of strong interest from Chinese and international institutional investors, the order book recorded over US$200mm orders in less than one hour of the official book opening, and hit US$700mm at its highest point, with a 3.5x oversubscription, well exceeding the issue size. Final price was successfully tightened by 12.5bps from the initial pricing guidance.

The Offering attracted overwhelming demand from various international financial institutions and fund management companies, with order book covering around 50 institutional investors across Asia and Europe. Among which, banks and fund management companies contributed to 78% of the order book, with the remaining 22% from internationally renowned private banks. Apart from the existing bond investors of AMTD Group, the Offering also attracted many new investors, demonstrating the quality of the AMTD brand in the international capital markets, and reflecting investors’ strong confidence and support on AMTD’s business prospects.

The successful issuance of the senior perpetual bond represents a significant milestone to AMTD, as it will enhance its capital strength, optimize its asset/liability management, improve the efficiency of capital , increase the international presence and branding of AMTD, and facilitating the Group’s future global expansion and business development.

The Offering was led and arranged by the investment banking arm of AMTD Group. Other Joint Global Coordinators included Credit Suisse, Standard Chartered Bank and China Minsheng Banking Corp., Ltd., Hong Kong Branch and GF Securities. The Offering represents the 37th offshore bond offering completed by the investment banking arm of AMTD since 2016 and the 17th deal year-to-date, demonstrating AMTD’s strong execution capabilities and reputation in the international debt capital markets.

AMTD Group is a Hong Kong-based comprehensive financial institution with services coverage across China and the world. As one of the largest Hong Kong-based investment management companies and the biggest corporate insurance brokerage and risk solutions firm, AMTD has been widely recognized as a pre-eminent capital markets player with cross-border investment banking capability in Asia. Founded in 2003, AMTD’s key shareholders include CK Hutchison Holdings, Morgan Stanley, China Minsheng Investment Group and L.R. Capital Group. AMTD has always been dedicating to serving and connecting capital and resources across Mainland, Hong Kong and the globe. On par with multinational bulge brackets, the Group is capable of providing full-fledged securities services and investment banking business and is among the top bookrunners of both equity and debt capital markets in Hong Kong. AMTD is the largest corporate insurance brokerage and risk solutions firms based in Hong Kong, providing risk solutions alongside the internationalization of numerous Chinese companies. In addition, the Group also manages a rapid-growing asset portfolio and combines investment and financing across a global network. Meanwhile, AMTD has a long history of promoting technological innovation and the development of the sharing economy, especially in the field of Fintech investment. The development of AMTD Group has been strongly supported by our long-term shareholders, clients and strategic partners, and has become the new powerhouse among Hong Kong-based financial institutions in the international capital markets.