The flow of new Chinese property high-yield USD bonds since the beginning of the year has been unabated, other than around Chinese New Year. The raging demand is underscored by hearty orderbook sizes.
Of the new issuances from the sector so far in 2019, at least 10 deals received more-than-5x orders relative to their respective issue sizes, compared to only seven over the entire 2018.
The highest orderbook this year was for Shanghai-based Ronshine China’s USD 207.76m new-money portion of its USD 600m, 11.25% due-2021 notes, which attracted a whopping 15.4x orders thanks to the generous premium the deal offered relative to the developer’s curve. Second and third were developer and toll-road operator Road King Infrastructure’s USD 400m, 7.75% due-2021s and Guangdong-based Logan Property’s USD 300m, 7.50% due-2022s, with 10.25x and 10x, respectively.
Logan received only 5.95x orders for it USD 370m, 8.75% due-2020 bonds priced early December 2018. Another developer that generated much stronger demand this year was Fujian-based Zhenro Properties, whose sale of USD 230m, 9.8% due-August 2021s priced in February received 8.7x orders, compared with 2.14x for USD 280m, 12.5% due-2021s priced in September 2018.
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