Seazen Group (Ba2/BB+/BB), a Chinese property developer, raised a year green bond for as much as $100m. It was actually the first international completed deal this year. However, many market participants believe that the anchor investors are the firm’s own friends and parents. Thus, it is doubtful whether it could revive Chinese high-yield property bonds. Based on the Hong Kong stock exchange filing, the deal carried a coupon with the rate of 7.85%.
The bookrunners and lead managers of the deal are SunRiver International Securities Group and Seazen Resources. The sole coordinator for the Reg S deal was Haitong International. According to a source closer to the deal, Seazen took the benefit from government-driven onshore bond issuance. This is from three consecutive property developers for the past two weeks.
He argued that it is all thanks to the government’s support for relaxing the rules. Thus investors have become slightly interested in high quality real estate. There are many real estate firms raising a total of Rmb2bn onshore bond market in the past two weeks as well. They are from Longfor Group Holdings, Midea Real Estate, and Country Garden Real Estate Group. Based on the information, the government chose them to deal with market sentiment. CDS or credit risk mitigation warrants accompanied the deals. This is actually a credit-protection instrument in the onshore market.
Meanwhile, Lucror Analytics analysts argued whether or not global investors would be interested in this deal. This is because Chinese house Haitong was the only coordinator and Seazen resources. It means that Seazen Group owned 60% of it. In addition, there are also rumors on how a Shangdong estate enterprise was the buyer. Actually, Lucror since has the positivity that the firm could lead the new line of the U.S. high yield bond.
