China Railway Resources Huitung on January 30 priced its inaugural US dollar bond offering amounting to US$500 million, representing the first Chinese infrastructure construction company to tap the offshore bond market.

The Reg S 10-year deal was priced at 99.786% with a coupon of 3.85% to offer a yield of 3.876% - equivalent to a spread of 190bp over the US treasuries.

The management team undertook a three-day roadshow visiting investors in Hong Kong, Singapore and London to ensure coverage of all key accounts. The transaction garnered strong investor interest despite mounting volume of competing supply in recent weeks and emerging market volatility in the week leading up to the transaction announcement.

The deal generated a total order book of over US$8 billion from 350 investors with 70% of the bonds allocated in Asia and 30% in Europe. Asset and fund managers bought 52% of the paper, banks 21%, insurance and public sector 15%, private banks 9%, and corporates and others 3%.

The trade is described as a further move by Chinese state-owned enterprises to diversify their funding channels as well as bring sector diversity into the investment grade space.

Barclays, BOC International, Deutsche Bank, HSBC, Standard Chartered Bank and UBS acted as the joint bookrunners for the transaction.