Hong Kong’s CLP Power leaps into Australian market with US$339 million Kangaroo bond

CLP Power, Hong Kong’s biggest electricity provider, said it has launched a three-year A$500 million (US$339 million) Kangaroo bond, marking the first such foray by a Hong Kong commercial entity into the Australian market.

The Kangaroo bond is unconditionally guaranteed by CLP Power, which holds an A1 (stable) rating from Moody’s and an A+ (stable) rating from S&P. Kangaroo bonds are Australian dollar-denominated bonds issued by foreign entities in Australia.

“This successful issuance in the Australian market enables us to further diversify our sources of funding in a cost-effective way, and we are encouraged by the favourable market response,” said Alexandre Keisser, chief financial officer of CLP Holdings.

The floating-rate tranche was priced at 85 basis points above the benchmark three-month Bank Bill Swap rate.

The fixed-rate tranche was priced at 85 basis points above the semi-quarterly asset swap rate, equivalent to an annualised rate of 5.10 per cent.

The Kangaroo bond offering takes CLP Power’s debt capital market financing activities to the Australian onshore public market for the first time, according to the company. It will “broaden the company’s funding options and enhance its resilience against potential market volatility”, the press release said.

“We are delighted to have witnessed strong demand for this Kangaroo bond offering, which attracted participation from a diverse group of institutional investors across UK, Australia and Asia,” said Joseph Law, managing director of CLP Power.

“The strong market response to the offering is a vote of confidence in CLP Power’s business, and we will continue our efforts to deliver our 2024-28 development plan to support Hong Kong’s growth.”

ANZ is the sole coordinator and joint lead manager for the transaction, while KDB Asia and KIS Asia acted as joint lead manager and co-manager respectively, according to CLP.