Greentown China Holdings, a Zhejiang-based property developer, yesterday tapped the capital market for the second time in a week, raising US$300 million from the sale of convertible bonds to fund its expansion on the mainland, according to a term sheet sent to fund managers.
It was the fifth convertible bond sales issued by Hong Kong-listed mainland property developers so far this year, underscoring their hunger for fresh capital, especially yuan, to offset the tightening of bank lending by Beijing to cool the overheating domestic property sector.
The five-year yuan-denominated bond , to be settled in US dollars, can be converted into Greentown shares at HK$22.14 each, a 41 per cent premium to the HK$15.70 price at which the stock last traded before it was suspended yesterday.
Greentown shares have risen 8.43 per cent this year, outperforming the Hang Seng Index's 3.92 per cent gain.
The issuer is rated Ba2 by Moody's and BB by Standard & Poor's.
The zero-coupon bonds would mature in 2012 and return a yield of 1.1 per cent annually but could be sold back to the company in 2010, the term sheet said.
'Investors welcome the sale of [yuan-denominated bond] as it could allow them to gain exposure to yuan appreciation,' a source close to the deal said.