Shui On Land announced the results of its exchange offer yesterday, a complex transaction that showed the lengths Chinese property developers will go to in order to manage their debt repayments in light of a difficult funding climate for the mainland property sector. The company said investors exchanged US$793 million of outstanding debt due next year for new bonds with maturities of four and six years, and for cash. On April 14, the company proposed exchanging the equivalent of up to US$1.44 billion of notes due in 2015 for a new batch of securities due in 2018 and 2020, at enhanced coupons, and a money payout added as an inducement. This was done to extend the firm's debt maturity profile in the face of a heavy refinancing schedule next year. "The debt profile is not that ideal," said Daiwa Securities analyst Felix Lam. "It needs to spend a lot of money for expansion. To reduce the pressure on repayment, it's better for the firm to spread out its debt [maturities]." The company, which has 10.7 billion yuan (HK$13.3 billion) of debt maturing next year, according to Lam, has been trying to raise new money to manage its refinancing risks. "The company would like to handle [its debt maturities] and get better prepared for the repayment [of debt in] 2015 earlier than later," said Michelle Sze, the head of investor relations for Shui On. Shui On has been aggressively replenishing cash levels and securing fresh funding channels. At the end of last year, the company had obtained 14 billion yuan of committed bank loan facilities, Sze said. Shui On also raised 2.5 billion yuan in February through a three-year yuan bond. Also in February, Shui On took a US$500 million investment from Brookfield, an American private equity firm, for a pre-flotation stake in an entity called China Xintiandi, which holds Shui On's portfolio of premier office and retail properties in Shanghai. The firm said yesterday that investors had agreed to exchange 47.75 per cent of the US dollar notes targeted in the exchange offer, 27.4 per cent of the yuan notes, and to tender for cash a further 38.57 per cent of the yuan notes. The company sold US$266 million of new bonds in the market last month to help fund the cash portion of its exchange offer. All told, the firm has issued US$839 million in new debt with the exchange exercise. Mainland property markets have been under pressure since the default in March of Zhejiang Xingrun Real Estate on 3.5 billion yuan of domestic bank loans and other debt. That shut down the onshore and offshore markets for mainland real estate bonds for a month.