Two state-backed Asian oil companies have tapped the U.S. dollar bond markets with major offerings this week to healthy investor interest.
China’s Cnooc Ltd., raised US$2 billion worth of 10-year and 30-year bonds at lower yields than expected.
“The deal was so heavily oversubscribed that the investor call was canceled,” said Jesse Fogarty, portfolio manager at Cutwater Asset Management in New York, referring to a planned call with U.S. bankers. Mr. Fogarty said he wasn’t planning to buy the bonds.
The bonds received $12 billion of orders from Asian buyers and $3 billion from the U.S., he added.
Cnooc’s 30-year bond was stronger in initial trading on Thursday, trading around 1.72 to 1.75 percentage points over Treasurys. The bond was priced to yield 1.9 percentage points over comparable Treasurys.
As a high-quality corporate borrower in the energy sector of an emerging market, Cnooc ticked several boxes for investors diversifying their risks. Its offering also was the largest emerging-market bond priced in the U.S. since Petroleo Brasileiro SA sold $7 billion on Feb. 1, according to data provider Dealogic.
Separately, Indonesia’s PT Pertamina is seeking to price a 10-year and 30-year bond. Initial orders have been robust, with the offering receiving more than $4 billion, well above the $2 billion the company said it is planning to raise. Pertamina’s issue comes after PT Bank Negara Indonesia raised $500 million earlier this week, marking the return of Indonesian commercial banks to offshore dollar bond markets for the first time in almost ten years.
