The Hong Kong Property Developers Announced Their Financing Plan

As we can see from the news that several Hong Kong property developers recently declared

their bond financing architectural plan for land depositing, and the highest yield stood as high as 13.5%.

It is reported that the developers that chose to consequence bonds at the opening of 2011 included Hopson Development Holdings, Ltd. China South City Holdings, Ltd. China SCE Property Holdings and Evergrande Real Estate Group, Ltd. which finished two bond issuances and raised 1.35 billion U.S. dollars in 2010.It can be seen that last year, 18 Chinese real property developers advanced a total of 76.5 billion Hong Kong dollars from the capital market, which is to a higher degree double 2009 figures.

A good time for financing:

Monday, Evergrande said it architectural plan to issue RMB bonds settled in U.S. dollars to repay onshore bank loans and finance its property projects. Evergrande's Executive Chairman of the Board, Hui Ka Yan anticipates that the central government will strengthen regulatory measures toward the property market. He noted that market anticipations for yuan admiration and an active attitude to this kind of bonds make a convivial for financing.Hui said that the coupon rate for this year's bond issuance was lower than last year's.

It is reported that evergrande realized 7.61 billion U.S. dollars of contract sales in 2010, showing a year-on-year growth of 66.4%. The company's 2011 sales target was set at 10.57 billion U.S. dollars On Jan. 7, China South City tapped the U.S. dollar bond market with a 250 million U.S. dollars five-year non-call-three issue, and the coupon rate was set to 13.5%. More than 90 institutionalised investors took part in the company's financing plan, most of which are from Asia.

As we all know that on the same day, Fujian-headquartered residential developer China SCE Property priced a five-year 301 million U.S. dollars bond in a celluloid arrange, which means it is designated in yuan but settled in U.S. dollars. With a yield of 10.5%, China's SCE's bonds were eight times oversubscribed.

Downgrade risks:

New York-based ratings firm Moody's Corp. on Jan. 10 downgraded Evergrande's bond rating to B2 with a negative outlook. Moody's assistant vice president Kaven Tsang said that The negative outlook reflected that Evergrande's operation and financing risks would rise in the coming 12 to 18 months,added that the company seeked rapid enlargement, but Moody's anticipated a tougher property market and lendt environment in 2011.

Chinese developer Hopson Development Holdings annunciated on Jan. 10 its plans to issue U.S. dollar-denominated notes and a three-day road show starting Jan. 11. The proceeds are marked for filling again working capital and general corporate purposes.

Monetary standard and Poor's assigned a B rating to the proposed issuance due to the company's aggressive elaboration and lower-than-expected sales, which reflected a low executive ability.

by: Amanda Xia

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