Sunac is­sues US$1b off­shore bonds

New Straits Times - - Business -

HONG KONG/SHANGHAI: Sunac China Hold­ings Ltd has is­sued US$1 bil­lion (RM4.28 bil­lion) worth of bonds off­shore to re­fi­nance some of its ex­ist­ing debt, in the ac­quis­i­tive Chi­nese prop­erty de­vel­oper’s lat­est fundrais­ing af­ter a re­cent spate of deals.

The highly-lever­aged com­pany was tap­ping mul­ti­ple fi­nanc­ing chan­nels off­shore af­ter its credit risks came un­der scru­tiny in China on a string of high-pro­file pur­chases, in­clud­ing the US$6.52 bil­lion tourism projects deal with Dalian Wanda Group and a US$2.2 bil­lion stake in Leshi In­ter­net.

Last week, Sunac agreed a pri­vate share sale worth US$516.4 mil­lion.

Sunac said in a fil­ing yes­ter­day it is­sued US$400 mil­lion se­nior notes due in 2020 and US$600 mil­lion due in 2022 at coupon rates of 6.875 and 7.95 per cent, re­spec­tively.

The new bonds started trad­ing yes­ter­day, slightly weaker than their is­sue price.

“Clearly a bil­lion dol­lars across two tranches is a big size — nor­mally high yield names come in smaller tranches. And this is an ac­quis­i­tive com­pany,” said a bond trader, re­fer­ring to the weak de­but of Sunac’s new bonds.

An­a­lysts have said Sunac’s gear­ing ra­tio would surge to be­come among the most in­debted de­vel­op­ers in the coun­try af­ter the Wanda deal. Stan­dard & Poor’s has put Sunac’s rat­ing on Cred­itWatch Neg­a­tive, which means there was 50 per cent chance of neg­a­tive rat­ing. Reuters

BLOOMBERG PIC

Sunac China Hold­ings is tap­ping mul­ti­ple fi­nanc­ing chan­nels off­shore af­ter its credit risks came un­der scru­tiny in China fol­low­ing a string of high-pro­file pur­chases.

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