SC Lowy leads revival in China property high-yield bonds
05 January 2017, HONG KONG – Fixed-income specialist SC Lowy has been active in Asia’s new issue business and got 2017 off to a flying start, acting as bookrunner for two high-yield deals from the Chinese property sector in quick succession, amid strong investor demand.
On January 4, SC Lowy acted as joint bookrunner and joint lead manager on 3-year senior bonds of US$250 million by China Aoyuan Property Group, the first Asian dollar bond issuance of the year. This came just two weeks after SC Lowy led Logan Property Holding’s US$200 million three-year senior notes, issued on December 22.
These transactions underline SC Lowy’s growing impact in Asian high-yield primary issuance since launching our new debt capital markets business in 2015,” said SC Lowy chief executive Michel Löwy.
“The response to these bonds is highly encouraging as it signals the continuous popularity of Chinese developers within the international investor community in a year of considerable demand for refinancing of callable bonds,” said Florian Schmidt, SC Lowy’s head of debt capital markets. “Call and maturity schedules would point towards further Chinese high-yield issuance in the year ahead, although the regulatory environment in China and an uncertain macro outlook may lead to surprises.
China Aoyuan Property Group is a renowned property developer and a pioneer of integrated real estate developments in China. It has over 50 successful projects across China, as well Sydney in Australia. The China Aoyuan US$250 million 6.35% bond was 9-times subscribed with the order book reaching US$2.25 billion. Proceeds will be used to refinance existing debt. An 11.25% due 2019 note becomes callable in January 2017.
Logan Property is a leading property developer with a business focus on the Guangdong and Guangxi provinces. The Company has been named in the Top 100 Chinese Real Estate Companies for six consecutive years and was awarded one of Forbes Asia-Pacific 50 Top Public Companies in 2016. Even though Logan’s bond execution was pushed close to the Christmas break, it received a strong following from a variety of quality Chinese and international fund managers. Proceeds will be used to refinance existing debt.