Hutchison Whampoa, the Hong Kong conglomerate controlled by the tycoon Li Ka-shing, has boosted confidence in Asia-Pacific fixed income markets by planning to sell up to $1.5bn of 10-year dollar-denominated bonds.

The issue is a sign that Asia’s corporate bond market is picking up after months of inactivity in the wake of the collapse of Lehman Brothers.

Hutchison’s planned issue follows the sale last month of $700m of five-year dollar bonds by the world’s fourth-largest steelmaker, Posco of South Korea, amid a slowly rising risk appetite for emerging market debt. Bond sales in dollars, euros and yen from Asia ex-Japan rose 50 per cent in the first quarter to $10.6bn from a year ago, driven by deals by state-run companies and banks, according to Thomson Reuters. This will be Hutchison’s first international bond issue since it raised $5bn in November 2003. That was the biggest global issue yet by an Asian company, according to Thomson Reuters.

This bond will probably be priced at 487.5 basis points above the yield on US 10-year Treasury bonds, according to a person familiar the deal, which was tighter than an earlier indication of around 500bp.

“The pricing looks OK, but it’s not fantastic to be honest,” said one fixed-income fund manager. “But demand is quite strong. We haven’t really seen too many corporate issues in Asia recently. Most issues have been by governments or government-linked bodies. There’s a lot of appetite for high-grade corporate debt.”

Standard & Poor’s, the credit rating agency, provisionally graded the proposed bond issue at A- with a stable outlook. S&P said the majority of the proceeds would be used to refinance Hutchison’s existing borrowings. The rating “reflected the company’s strong cash flows from non-3G businesses, its diverse assets with good market position, and strong liquidity and financial flexibility.”

Deutsche Bank, HSBC, and JPMorgan are handling the issue.

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