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First non-enhanced greenback bond from a China property developer in 2022 is simply $100 mln

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By Clare Jim

HONG KONG, Might 31 (Reuters)Seazen Group Ltd 1030.HK mentioned on Tuesday it had bought inexperienced notes value $100 million, the primary offshore bond to be issued by a Chinese language property developer this 12 months with out some type of credit score enhancement.

However the comparatively small measurement of the problem, the quick period of the notice and its excessive coupon make it onerous to gauge whether or not the sale represents a real check of investor urge for food for China’s extremely indebted property improvement sector which has been badly battered by a liquidity squeeze.

Shanghai-based Seazen mentioned in a submitting {that a} subsidiary had issued senior notes due June 1, 2023 at coupon fee of seven.95%.

“Now we have but to see any longer-tenor issuances of say 2-3 years; if it occurs, it is going to be a sign that the market is beginning to get well,” mentioned Fitch Scores senior director Adrian Cheng.

Seazen mentioned the proceeds will likely be used to refinance mid-to-long-term offshore debt due inside one 12 months and for inexperienced tasks. It has $400 million value of notes maturing in June and one other $400 million mixed due in August and September, in response to Refinitiv knowledge.

Cheng mentioned the sale will assist Seazen’s liquidity however Fitch continues to be monitoring whether or not the developer can discover different methods to refinance upcoming maturities.

Fitch in April downgraded Seazen’s credit score scores to ‘BB’ from ‘BB+’ with unfavourable outlooks, citing a deterioration in monetary flexibility amid concentrated debt maturities.

But it surely added that Seazen’s liquidity was ample, supported by sturdy entry to financial institution loans and an funding property portfolio that may generate 10 billion yuan in recurring revenue and supply the agency with different funding choices.

Seazen’s greenback bond due in August was buying and selling at 95.270 cents on the greenback on Tuesday in comparison with 95.264 on Monday, knowledge from Period Finance confirmed.

Its Hong Kong-listed shares gained over 2%, outperforming a 0.7% rise within the Dangle Seng Mainland Properties Index .HSMPI.

There was little company bond exercise from Chinese language actual property companies after some builders together with China Evergrande Group 3333.HK defaulted on some offshore funds final 12 months, rattling investor confidence within the trade which accounts for a couple of quarter of the nation’s economic system.

Just a few high-quality non-public builders together with prime participant Nation Backyard 2007.HK issued company yuan bonds onshore this month, responding to a regulatory name to spice up issuance and assist enhance market sentiment for the sector.

(Reporting by Clare Jim; Enhancing by Edwina Gibbs)

((clare.jim@thomsonreuters.com;))

The views and opinions expressed herein are the views and opinions of the creator and don’t essentially mirror these of Nasdaq, Inc.

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