CIFI Chairman Lin Zhong
CIFI Holdings (Group) Co. Ltd. (HKEX Code: 884), a top 100 real estate developer in China, announced today that the Group has issued its third tranche of five-year USD bonds with a coupon rate of 8.875%.
According to the company, it has an order book of over USD1.1bn for the bonds from investors in Asia and Europe, the net proceeds of which will mainly be used to refinance the Group’s existing debt and for other general corporate purposes.
Mr. LIN Zhong, CIFI’s Chairman, commented, “Our new bonds were issued at a coupon rate of 8.875% per annum, a remarkable decrease of 3.375 percentage points in just nine months compared to the first USD bond issue in April 2013 at a coupon rate of 12.25%. This reflects that CIFI’s operational strategies and continuous business growth have been widely recognized by the investment community.”
CIFI was given issuer credit ratings of B+, B1 and B+ by Fitch, Moody’s and Standard & Poor’s, respectively. The latest bond issue is expected to receive issues ratings of B+, B2 and B by Fitch, Moody’s and Standard & Poor’s, respectively.
CIFI’ new bond issue was lead managed by Standard Chartered Bank, Citi, Deutsche Bank, HSBC and Haitong International.
CIFI’s bond issue was joined this week by a parallel debt financing drive by rival Greentown China as the country’s real estate developers are forced to look overseas for funding due to a government lending crackdown domestically.
Analysts are now predicting slower growth for China’s real estate sector in 2014, with one investment bank foreseeing expansion of 15 percent in 2014, a major drop-off from the 19.8 percent rate in 2013.primarily due to the challenges and expense of raising capital.
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