KWG Property is marketing US dollar bonds less than two weeks after scrapping an offering.
KWG, whose projects include the five-star Sheraton Huadu Resort in Guangzhou, was seeking to sell as much as US$300 million of seven-year notes yielding about 9.25 per cent, a person familiar with the deal said.
KWG had originally planned to issue undated notes, another person said earlier this month.
"Investors are pushing back on structures," said Owen Gallimore, a credit analyst at Australia & New Zealand Banking Group. "The new KWG deal confirms the appetite isn't there for high-yield perpetual bonds with limited incentive to call."
This year's record start for dollar bond sales by real estate companies from the mainland and Hong Kong included a US$300 million offering from Hopson Development that is rated seven levels below investment grade, and perpetual notes from Agile Property.
A pullback in risk appetite has seen Agile's securities slump to 93.5 cents on the dollar after pricing at par on January 11.
In other US dollar debt offerings yesterday, Melco Crown Entertainment, the casino venture between Australian billionaire James Packer and Lawrence Ho Yau-lung, was marketing US$1 billion of eight-year bonds at about 5.25 per cent, a person familiar with the matter said.
A unit of China Railway was offering 10-year debt at about 220 basis points more than treasuries while South Korea's Hana Bank was selling three-year notes at a spread of about 120 basis points, people said.
India's Reliance Industries, which has investment-grade debt rankings from Moody's Investors Service, Standard & Poor's and Fitch Ratings, was marketing undated bonds at a yield of 5.875 to 6 per cent. KWG had planned to sell securities that it could opt to buy back after 5-1/2 years, a person familiar with the matter said on January 15.
If it did not, the coupon was to reset based on prevailing five-year treasuries and every five years after, and increase 25 basis points after 10-1/2 years with a further rise of 75 basis points after 20-1/2 years.
The developer had no urgency for the financing and "temporarily cancelled" the offering, said Roger Law, a vice-president of finance at KWG.