Country Garden in US$1b bond sale
Country Garden Holdings, a Guangdong property developer whose share price has doubled since it raised HK$14.85 billion in a Hong Kong initial public offering in April, plans to raise as much as US$1 billion in a bond sale, market sources said.
Seven banks - Citi, UBS, Morgan Stanley, Deutsche Bank, Bank of China International, JP Morgan and HSBC - had been hired to arrange the sale, the developer said in a filing with the stock exchange.
The bonds would mature in five and 10 years, it said in an email to investors.
A roadshow for investors in Asia, Europe and the United States, would kick off tomorrow in Hong Kong, one source said. Proceeds of the bond sale would go towards financing new projects and repaying debt.
Moody's Investors Service gave the bonds a provisional Ba1 rating yesterday, the rating agency's highest non-investment grade rating.
'Country Garden has demonstrated the success of its business model in Guangdong. It remains to be seen if the applicability of such a model - in terms of achieving the scale and profitability anticipated' - held up in other parts of the mainland, said Peter Choy, Moody's vice-president and senior credit officer.
Meanwhile, Wharf (Holdings) raised US$400 million from the sale of 10-year bonds through its unit Wharf Finance, according to a term sheet sent to fund managers.
Proceeds from the fixed-rate, unsecured notes, priced at mid-swap plus 110 basis points, are for general corporate purposes. The notes were rated BBB by S&P, or three steps above non-investment grade.
The notes were originally priced between mid-swap plus 110 and 120 basis points before going to a tighter 110 and 115 basis points due to strong demand, market sources said.
HSBC Holdings and UBS were hired to arrange the sale.
