International Financing Review Asia February 10 2018 19COUNTRY REPORT CHINACHINA
DEBT CAPITAL MARKETS
› GREENLAND DRAWS ROBUST ORDERSGREENLAND HOLDING GROUP, rated Ba1/BB/
BB, drew final orders of US$1.9bn for a
US$700m dual-tranche offering of US dollar
senior unsecured notes.
The Chinese property developer priced
on February 2 US$400m of 5.25% three-year
notes at 99.317 to yield 5.50% and US$300m
of 5.90% five-year notes at 99.043 to yield
6.125%, both at the tight end of final
guidance ranges and well inside the initial
5.750% area and 6.375% area, respectively.
Proceeds will be used for debt
refinancing and general corporate
purposes.
The three-year tranche drew orders of
US$1.1bn from 47 accounts. Asia took 87%
and Europe got 13%. In terms of investortypes, 34% were private banks, 33% were
asset managers, 32% were banks, and 1%
were corporations.
Orders for the five-year tranche came to
US$800m from 45 accounts. Asia took 88%
and Europe got 12%. In terms of investor
types, 53% were asset managers, 26% were
private banks, 10% were banks and 11%
were corporations.
Greenland Global Investment is the
issuer of the Reg S notes, while Greenland
Holding Group is the guarantor. The notes
have an expected Ba2 rating from Moody’s.
BOC International and China Citic Bank
International were joint global coordinators,
as well as joint bookrunners and joint lead
managers with China Chengtong and VTB Capital.› RED STAR MACALLINE EYES US$700MRED STAR MACALLINE GROUP, rated BBB/BBB
(S&P/Fitch), said its board had approved
the issuance up to US$700m of US dollar
notes, via wholly owned subsidiary Hong
Kong Red Star Macalline Universal Home
Furnishings.The proposed notes would have a tenor
of no longer than 10 years, it said in a stock
exchange filing.
Proceeds from the issue, which needs
shareholder approval, will be used
to finance construction of projects,
investments or acquisitions in the home
furnishing-related areas, as well as
replenishment of working capital.
Last September, the operator of Chinese
shopping malls for home furnishings issued
US$300m of 3.375% five-year bonds at
99.413 to yield 3.504%.› FANTASIA PRICES 364-DAY NOTESFANTASIA HOLDINGS GROUP, rated B2/B+
(Moody’s/S&P), drew final orders of
US$1.1bn from 94 accounts for US$300m of
short-term US dollar senior bonds.
The Chinese property developer offered
the unrated 364-day Reg S notes at par
to yield 7.25%, well inside initial price
guidance of 7.5% area.
Proceeds will be used for debt repayment.
Asia took 99% of the notes and EuropeTwo LGFVs print dollars despite conditions
Bonds Issues draw support from anchors amid heightened volatility in global marketTwo Chinese local government financing
vehicles braved the volatile market last
Wednesday to print US dollar bonds for a
combined US$500m, as anchor orders gave
bookrunners the confidence to proceed.
FUJIAN ZHANGLONG GROUP, based in
Zhangzhou in Fujian province and rated BB+
(Fitch), priced US$300m 5.60% three-year
notes at 99.321 to yield 5.85%, inside initial
guidance of 6.0% area.
Shangrao Investment Holding Group,
based in Shangrao in Jiangxi province, priced
US$200m 5.70% three-year notes at 98.116
to yield 6.40%, versus initial guidance of
6.5% area.
People familiar with the issues said both
were heavily anchored.
The transactions came amid heightened
volatility in global markets with stocks
tumbling and the 10-year US Treasury yield
spiking to a four-year high on expectation
of faster rate hikes in the US in reaction to
inflationary pressure.
“Anchor investors’ interest in the deal
was not affected by recent market volatility,
which gave us confidence to launch the
deal,” said a banker on the Zhanglong
issue.
However, he admitted that other investors
had become more cautious and picky, andhad asked for more price concessions due to
the poor overall sentiment.
Zhanglong still has US$200m of offshore
debt issuance quota available after the latest
issue, according to another banker.
Shangrao Investment has used up its
entire US$500m quota after the latest
issue, as one of its subsidiaries, SHANGRAO
CITY CONSTRUCTION INVESTMENT DEVELOPMENT
GROUP, used part of it last December for
US$300m of three-year bonds priced at par
to yield 5.70%.
Shangrao’s 5.70% 2020s were quoted at
a cash price of 99.625/100.125 or a yield of
5.841%/5.650% in the secondary market late
Thursday morning, according to Tradeweb.
The notes have a BB+ rating from Fitch.
Based on this, both newly priced notes
from Zhanglong and Shangrao offered
higher yields.
Zhanglong’s new bonds were quoted at a
cash price of 98.875/99.375 late Thursday
morning, while Shangrao’s notes were
quoted at 97.75/98.25, according to a trader.
Zhanglong is involved in trading, water
supply, real estate and construction
businesses.
Its bonds were issued via wholly owned
unit Full Dragon (Hong Kong) International
Development and Zhanglong serves asguarantor. The Reg S notes have an expected
rating of BB+ (Fitch).
Proceeds will be used for domestic debt
refinancing and project investments.
Shangrao has assets in infrastructure
construction, tourism, water supply and
waste-water treatment, state-owned asset
management and other businesses.
Wholly owned subsidiary Shangrao
Investment Holdings International is the issuer
of the Reg S unrated notes and Shangrao
Investment Holding Group is the guarantor.
Proceeds will be used to finance existing
projects, repay bank borrowings and meet
general corporate needs.
CEB International was sole global
coordinator on Zhanglong’s issue. It was also
joint bookrunner and joint lead manager
with Mizuho Securities, Bank of China, China
Industrial Securities International, Chiyu
Banking, Fortune (HK) Securities, Industrial
Bank, Hong Kong branch, SPDB International
and Wing Lung Bank.
SPDB International was sole global
coordinator on Shangrao Investment’s deal.
It was also joint bookrunner and joint lead
manager with Shanghai Pudong Development
Bank, Singapore branch, BOC International
and Orient Securities (Hong Kong).
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