Agile offers 9.5pc on US$ bond

Business | Reuters 16 Nov 2018

Chinese property developer Agile Group is offering to pay a coupon of about 9.5 percent on a two-year US dollar bond now on sale, following peer KWG Group issuing a similar note for 9.85 percent.

Guangzhou-based KWG sold US$400 million (HK$3.12 billion) senior notes due 2020 on Wednesday, it said in a filing.

Agile said it plans to use the proceeds to refinance existing onshore and offshore indebtedness. UBS is the global coordinator of the issuance.

Agile has a BB rating from S&P while KWG has a B+, which is two notches lower.

Bankers said the high-yield bond curve was pushed up further after major developer China Evergrande Group's (3333) US$1.8 billion bond sale late last month, with its two-year tranche offering a coupon of 11 percent.

China's largest developers by sales revenue are Country Garden (2007) and Evergrande, according to property researcher CREIS.

PIMCO estimates China attracted US$86 billion in foreign bond inflows and US$30 billion in equity investments over the past 12 months.

PIMCO finds value in dollar-denominated bonds in Chinese real estate, adding that the top-five players in the space are deleveraging and have gained market share.

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