Chinese developer Country Garden will issue bonds to refinance debt

Country Garden plans to raise an undisclosed amount in senior notes to refinance its existing US$900 bond that will mature in 2018, the Chinese property developer said in a filing with the Hong Kong stock exchange on Thursday.

The latest fund-raising plan by the property developer comes shortly after it raised HK$3.2 billion in a rights offering last year, when the company announced it would cut its funding cost by half to 4 per cent.

The company said the proceeds from the proposed bond offering would be solely used for refinancing outstanding debt.

Country Garden’s new chief financial officer Wu Jianbin last year said the developer plans to halve the company’s funding cost in the next two years and begin strategic changes to make it more diversified in a cooling property market.

After leaving China Overseas Land and Investment to join Country Garden in April, Wu has scaled down the Guangdong-based developer’s aggressive expansion abroad. It now accounts for a tenth of the company’s investment, from a third before.

JPMorgan, Goldman Sachs, HSBC, Deutsche Bank, and CLSA are handling the offering.