Raymond (L) and Thomas (R) Kwok appear to be quite close
Sun Hung Kai Properties (SHKP), which has invested heavily in mainland real estate and whose co-chairmen went on trial for corruption last week, successfully priced a S$320 million ($256.26 million) bond on Friday as developers in Greater China gird for a bear market.
The Hong Kong-based company, which is already the world’s largest listed developer by market value completed the sale of its Singapore dollar-denominated, fixed-rate bond within three hours, according to an account in the South China Morning Post.
The issuance was handled through Singapores United Overseas Bank (UOB) and the bonds have a maturity date of 2021with an annual coupon of 3.25 percent.
Securing Funding in a Downturn
Market sources said that the proceeds of the bond sale would be used for Sun Hung Kai’s “general corporate funding,” however, the company has already invested heavily in in mainland real estate. In Shanghai, SHKP has developed the successful IFC mall in Pudong, as well as the recently opened IAPM on Huaihai Road and a number of other retail, office and residential projects.
The company also set a high-price record last year when it bought a plot of land in the Xujiahui area of Shanghai for RMB 21.77 billion.
As the Hong Kong residential market heads into a downturn, and the mainland’s property market has begun to look increasingly unstable, many developers are scrambling to store up their balance sheets either to ensure cashflow or enable acquisitions during the coming months.
Kwok Brothers on Trial
The bond sale also happens at an interval of particular uncertainty for the leadership of SHKP as the two brothers who control the company went on trial for bribery in Hong Kong last week.
Co-chairmen Thomas and Raymond Kwok along with three other defendants – including Hong Kong’s former chief secretary were charged with a number of offenses, including conspiracy to offer advantages to a public servant and misconduct in public office.
The two brothers are ranked 86th on the 2014 Forbes list of the world’s richest people.
Leave a Reply