On 13 December 2016, L.R. Capital Group (the “Group”), a professional global investment company and a multi-family office, announced the successful issue of a Reg S 3-year 5% US$150mm bond (the “Transaction”) through the first drawn down under the US$500mm MTN Programme by L.R. Capital Group. The bond is listed on the Singapore Exchange (SGX).
L.R. Capital Group has been advocating the idea of the “linkage of global resources and capital”, with an extensive network across Asia, Europe and North America. The Group targets at connecting China and the international capital markets, focusing on a wide range of sectors in both the developed and developing economies, including financial services, new energy, technology and healthcare. L.R. Capital has always been aware of the vital importance of investment and development in the Asia-Pacific region in recent years, especially in the Greater China. The Group has successfully completed multiple strategic investments including: completion of the US$250mm GF Securities H-share IPO cornerstone investment; an investment of HK$2.06bn in the H-share privatization of Dalian Wanda Commercial Properties; US$130mm investment in the H-share placement of China Taiping; RMB500mm pre-IPO investment in Xinte Energy.
Not only was this issue the first USD bond offered by L.R. Capital in Asia, but also one of the few public offerings by family offices in the global markets. The issuer of this Transaction was one of the L.R. Capital Group’s investment platforms in Asia. Despite the unrated nature, on the back of The Group’s credit strength, strong background of its shareholders, sound financial foundation and a reputable branding, the Transaction, a Reg S 3 year 5% US$150mm bond, was successfully listed on the Singapore Exchange (SGX) with less than 2 full fiscal years of financials, of which is indeed a rare case in the market.
Ahead of the The Federal Open Market Committee (FOMC) meeting, of which a rate hike of 25 bps has been widely expected by the markets, along with the rallying U.S. Treasury yields, volatility and uncertainties remain as a cause of grave concern in global capital markets. Despite all the unfavoured market conditions, on the back of the strong credit quality of The Group, the Transaction was met with overwhelming demand by investors. L.R. Capital’s management team arranged 3-full-day roadshows in both Hong Kong and Singapore and met with more than 100 institutional investors during the roadshow presentations. The Transaction was oversubscribed by international and Chinese investors by 2 times during the book-building process, which allowed The Group successfully priced the Transaction at 5% versus the initial pricing guidance at 5.25% area. Once again, branding and development prospects of The Group have been highly recognized. This is also the first public USD bond offering by a family office in history, in the absence of ratings by international agencies and credit enhancement by banks, but with less than 2 full fiscal years of financials by one of the Asia investment platforms of L.R. Capital Group.
Mr. Raymond Yung, Chief Executive Officer of L.R. Capital Group said, “the successful public issuance of USD bond has not only established a solid foundation for the Group’s strategic development within Asia and strengthened the business relationship with Asian countries, in particular China, but it also reveals the bright future pipeline of L.R. Capital that is well-recognized in the international capital markets. L.R. Capital will continuously adhere to its investment strategy, “Linkage of Resources and Capital”, to fully utilize and leverage its extensive resource network, flexible management structure, strict risk management & internal control system, ultimately bringing unique values and synergies to its global investment portfolio. L.R. Capital would like to consolidate its global strategic investment platform and Multi-family office through making investments in innovation area, linking resources to make bigger accomplishments.”
AMTD, UBS AG Hong Kong Branch, GF Securities (Hong Kong) Brokerage Limited, China Everbright Securities (HK) Limited acted as the Joint Global Coordinators (JGCs) in this transaction. China Merchants Securities (HK) Co., Ltd., Sun Hung Kai Investment Services Limited, Zhongtai International Securities Limited, Huarong International Securities Limited, ABCI Capital Limited, Guotai Junan Securities (Hong Kong) Limited, Ping An of China Securities (Hong Kong) Company Limited, Shanghai Pudong Development Bank Co., Ltd., Hong Kong Branch, Winsome Capital Limited and Bali Securities Co. Limited, acted as the Joint Bookrunners (JBRs) in this transaction.