First-time rating pays off for Lenovo

摘要

LENOVO GROUP, the world's largest manufacturer of personal computers, showed the benefits of investment-grade status as its first rated bond offering and inaugural Yankee issue delivered big savings. The Chinese company, which also makes servers and handheld devices, on Wednesday priced a US$1bn 10-year senior unsecured bond issue at par to yield 3.421%, or Treasuries plus 265bp, inside initial guidance of 310bp area. Just six months ago, Lenovo sold a five-year Reg S-only bond at a yield of 5.875%, equivalent to Treasuries plus 555bp at the time. The stark improvement in pricing this time was down to the issuer's decision to obtain international credit ratings and target the wider 144A/Reg S market for the first time.