Chinese real estate developers have rushed to the dollar bond markets in the new year following strong investor appetite for bonds priced on Monday from peers PowerlongZhenro, Yuzhou and Shimao that received orders 6-22x issue size. Combined issuance from developers on Tuesday stood at $3.06bn. We have summarized the new deals in the table below, along with the three-red-lines metrics for each of the issuers.

3RL (1)

Country Garden’s bonds have expected ratings of Baa3/BBB- and received combined orders of over $10.5bn, 8.75x issue size. Proceeds will be used for offshore debt refinancing. The strong demand allowed Country Garden to price the new bonds inside its curve with the new 2026s priced 33bp inside its 4.2% bonds due February 2026 that is currently yielding 3.04% and the new 2031s priced 10bp inside its 3.875% bonds due October 2030 that is currently yielding 3.44% on the secondary market.

Yango Group’s bonds are unrated and received orders of over $800mn, 4x issue size. Yango Justice International is the issuer and Yango Group is the parent guarantor. Proceeds will be used for refinancing offshore debt.

Modern Land (China’s) bonds have expected ratings of B3/B and received orders over $3bn, 12x issue size. Proceeds will be used for debt refinancing. The bonds were priced at a new issue premium of 40bp over their 11.5% 2022s that currently yield 10% in the secondary market.

Road King Infrastructure’s bonds have expected ratings of Ba3/BB- and received orders over $3.2bn, 6.4x issue size. Proceeds will be used for refinancing and general corporate purposes. The bonds were priced in line with their 6% 2025s that currently yield 5.2% in the secondary market.

CIFI Holdings’ new bonds have expected ratings of Ba3/BB-/BBB- and received orders over $3.4bn, ~8.1x issue size. Proceeds from the benchmark issue will be used for debt refinancing. Asia took 82% of the bonds, EMEA and offshore US investors took 18%. Fund managers and corporates booked 72%, public sector investors 16%, banks 5%, and private banks 7%.

Sichuan Languang’s bonds are unrated and received orders over $1.7bn, ~5.7x issue size. Asia Pacific took 99% of the bonds and offshore US accounts took 1%. Fund managers, asset managers and hedge funds booked 88%, banks and financial institutions 8%, and private banks 4%. Hejun Shunze Investment is the issuer and the Shanghai-listed parent company is the guarantor. Proceeds will be used for offshore debt refinancing. Sichuan Languang has also launched a tender offer for its outstanding $192mn 9% bonds due 2021 at $1,006.5 plus accrued and unpaid interest for every $1,000 in principal and the deadline is on January 12. The 9% 2021s currently trade at 100.48.

Zhongliang Holdings’ bonds have expected ratings of B+ and received orders over $2bn, 10x issue size. The tap trades at a new issue premium of 11.5bp over their initial 9.5% 2022s yielding 8.51% in the secondary market. The developer is offering to purchase its outstanding $250mn 8.75% bonds due February 16, 2021 up to the tap size of $200mn at $1,005 for every $1,000 in principal with a deadline of January 13. The 2021s are currently trading at 100.2.

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