Sunac issues US$1b offshore bonds
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