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HONG KONG: New World China Land has raised 4.3 billion yuan (RM2.1 billion) in the biggest corporate dim sum bond issue in Hong Kong.
On April 2, the developer said it had on March 29 sold 2.8 billion yuan of notes due in 2015. The bonds were sold at a yield of 8.5%.
According to Bloomberg, the developer had reopened the sale of dim sum bonds with 1.5 billion yuan of additional securities. The new notes were priced to yield 8.125%, according to a person with direct knowledge of the matter.
Many mainland China and Hong Kong developers are actively raising money. China Overseas Land & Investment signed a three-year, HK$7.6 billion (RM3 billion) club loan with 12 banks last Wednesday. The proceeds will mainly be used to repay some existing loans and for property development.
Nicole Wong Yim, regional head of property research at brokerage CLSA, said it has become easier to issue bonds of late because of better market response.
“Banks in Hong Kong have sold European bonds since the eurozone economy showed signs of stabilising. Their Hong Kong dollar deposits have also been increasing as yuan appreciation has slowed,” she said. The increase in fund-raising could be a result of developers looking to refinance existing loans that are close to maturity, or to finance acquisitions, she said
Meanwhile, Fitch Ratings downgraded Shimao Property Holdings’ long-term foreign currency issuer default rating and foreign currency senior unsecured rating from BB+ to BB. It called the company’s outlook stable.
The rating firm said the downgrade reflected Shimao’s increased leverage and a rental-income-to-ebita ratio that was less than expected. Earnings before interest, taxes and amortisation (Ebita) is widely used as a measure of a company’s profitability and efficiency.
The company’s financial profile has weakened as a result of slow housing sales in 2011, despite Shimao’s aggressive pace of land bank acquisition in 2009 and 2010.
Shimao recorded 7.3 billion yuan from contracted sales in the first quarter, 15% more than a year ago. Shares in Shimao rose 2.79% to close at HK$9.59 last Friday. — South China Morning Post
