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Bonds

Warehouse giant GLP issues 1b yuan worth of panda bonds on China’s interbank market

Proceeds to repay existing debt and fund business growth in China

PUBLISHED : Wednesday, 18 October, 2017, 12:36pm
UPDATED : Wednesday, 18 October, 2017, 10:29pm

Global Logistic Properties Ltd, the Singapore-based logistics giant, said it has issued 1 billion yuan worth of bonds on China’s interbank market with the proceeds to be used to repay existing debt and raise funds for its China business.

“The issuance is consistent with our policy to naturally hedge by financing operations in local currency and diversifying our sources of funding,” said Teresa Zhuge, co-president of GLP China.

The so-called panda bonds have a five-year tenure and carry an annual coupon of 4.99 per cent.

On Tuesday GLP said the offering has been oversubscribed more than 2.6 times on the back of strong interest from institutional investors.

Panda bonds, yuan denominated debt issued in China by overseas companies, kicked off in 2005 but have been lagging behind yuan-denominated bonds sold in the offshore market, known as dim sum bonds. However, Chinese and foreign investors have been favouring panda bonds since last year, as they vie to raise cheaper funds and seek better returns amid a depreciating yuan.

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GLP, which is in the midst of privatisation, also announced that in the past three months it has leased out 1.9 million sq ft of global space to third-party logistics providers. Of this space, five customers in China are taking over 1.5 million sq ft. They include Best Inc, one of GLP’s largest customers by leased area in China, as well as Suning, a major China retailer of home appliances and electronics.

“The global shift towards e-commerce is changing the requirements for the location and design of logistics facilities,” said Stephen Schutte, chief operating officer of GLP.

“GLP has been anticipating and adapting to our customers’ changing needs by providing solutions instead of just properties,” he said.

One of Asia’s largest providers of modern logistics facilities, GLP manages nearly 650 properties in logistics parks across more than 60 major cities in China, Brazil, and Japan, with an area comprising about 275 million sq ft.

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