Chinese property developer Sunac (Ba3/BB-/BB) raised $1.1bn via a dual tranche offering. It raised $600mn via a 3.25Y non-call 2Y (3.25NC2) bond at a yield of 5.95%, 55bp inside initial guidance of 6.5% area. It also raised $500mn via a 5Y non-call 3Y (5NC3) bond at a yield of 6.5%, also 55bp inside initial guidance of 7.05% area. The bonds have expected ratings of B1/B+/BB and received orders of over $7.4bn, 6.6x issue size.
The 3.25NC2 bond drew final orders of over $4.2bn. Asian investors took 88% and EMEA 12%. Asset/fund managers were allocated 92%, banks and financial institutions 3%, and private banks and others 5%. The bonds were priced at a new issue premium of 16bp over its older 6.65% 2024s callable in August 2022 which currently yield 5.79% on the secondary markets. The 5NC3 drew final orders over $3.1bn. Asian investors took 89% and EMEA 11%. Asset/fund managers received 91%, banks and financial institutions 4%, and private banks and others 5%. The final pricing was wider than the fair value estimate of Nomura’s trading desk of 5.5% and 6.4% whereas CreditSights’ fair value estimate was 5.8% and 6.65% for the two tranches. Proceeds from the issue will be used for debt refinancing.