Pakistani textile and fertiliser maker has postponed its international bond issue due to poor market conditions, sources familiar with the deal said on Friday, with other pending high yield issues from Asia also seen as vulnerable.
Azgard Nine said in May its debut international bond, sponsored by Citigroup, would be worth up to $260 million, and have a tenor of between seven and 10 years.
The fate of at least three other sub-investment grade issues in Asia, worth nearly $800 million in aggregate, was also in doubt amid the global investor flight from higher-risk assets.
"A lot of people are reeling from the recent market volatility. Large public high-yield deals will have difficult time getting down," said Eugene Kim, Hong Kong-based chief investment officer at Tribridge Investment Partners.
In the past month, investor presentations for four high yield bond offerings from Asia, including Azgard Nine, were completed but none of them launched bond issues.
China property firm Hong Long Holdings Ltd has plans to issue bonds of up to $200 million; Indonesian mobile phone operator PT Mobile-8 Telecom Tbk is mulling a $150 million debt offering; and Indonesian power company PT Cikarang Listrindo intended to sell bonds worth $425 million.
Roadshows for the Azgard Nine issue, which has been assigned a B-plus rating by Standard & Poor''s Rating Services for a total issue size of up to $260 million, were completed last month.
A source involved in the transaction said the issue was deferred because of the prevailing market conditions. "Unfortunately for us, the international bond market has been pretty weak in recent days, and hence it is not advisable to go for the issuance at the moment," he said.
The international bond market has been generally weak in recent weeks, as investors turned more risk averse due to fears of losses from the troubled US subprime mortgage market.
Results of a survey released on Friday showed that Asian investors were downbeat on junk bonds amid the current environment of risk aversion. A Hong Long spokesman declined comment while officials at Mobile-8 and Cikarang Listrindo could not be reached for comment.