Li & Fung, a Hong Kong-headquartered multinational provider of supply chain solutions, navigated a volatile market environment as it priced on July 30 a US$300 million bond offering to refinance existing debt maturing this year.

The Reg S 3.5-year non-call two-year bond was priced at 98.890% with a coupon of 8.375% to offer a yield of 8.750%. This was 25bp inside the initial price guidance of 9% area.

In a parallel deal, the company is offering to repurchase up to US$50 million of perpetual securities using internal cash reserves. Both transactions are expected to close on August 5 and 6 2025, respectively. Together, these exercises result in an effective after-tax interest cost of 6.8%, reflecting tax-deductible interest expenses and net interest savings from the securities repurchase – a compelling outcome that underscores Li & Fung’s disciplined financial strategy and strong market position.

While Li & Fung has ample liquidity to fully retire its existing debt maturing in 2025, the company’s decision to issue new bonds strengthens its balance sheet and helps preserve financial flexibility amid the prevailing uncertain market environment. The deal was three times oversubscribed with a final order book of close to US$1 billion, with strong participation from key global institutional investors.

The robust investor demand for the issuance, the company points out, is a resounding vote of confidence in the newly transformed Li & Fung. It says the combined strategy of external fundraising and internal capital deployment reflects its conviction in the business’s long-term value and reinforces its ability to navigate volatility while remaining positioned for growth. “In today’s environment, every crisis presents both risks and opportunities, and Li & Fung stands ready to seize new opportunities, including disciplined strategic investments and acquisitions that further strengthen our platform,” it adds.

Citi, DBS and MUFG Bank were the joint global coordinators for the transaction, as well as joint bookrunners and lead managers, along with Goldman Sachs ( Asia ), Morgan Stanley and Standard Chartered.