New | Foreign investors unfazed by Kaisa's default
No increase in costs as mainland developers Jingrui and Landsea tap bond market
China's first default by a developer on offshore debt has not added to costs for fellow borrowers, with moves to relax policy countering any such concerns if two senior note issuances this week are any indication.
Jingrui Holdings and Landsea Green Properties came to the market this week, hot on the heels of Monday's failure by Kaisa Group Holdings to repay US$51.6 million in interest on two notes, maturing in 2017 and 2018.
Jingrui priced its three-year US$150 million senior notes at 13.25 per cent, slightly lower than the 13.625 per cent it paid in August last year on the same amount of five-year senior notes.
"Investors asked more questions about financial details and wanted to know more about our senior management team," Shanghai-based Jingrui said on Friday.
Landsea issued US$100 million of senior notes due in 2018 at 9.5 per cent.
Both firms said the price was no higher than last year and terms remained similar, bucking concerns Kaisa's default would see mainland developers' offshore fundraising costs shoot up and demand from foreign debt investors for more protection because they would be regarded as inferior to onshore creditors.
Analysts said that as the mainland authorities relaxed refinancing channels to support the struggling real estate industry and rev up economic growth, developers could turn to the domestic market if pricing offshore became more expensive.