China developer Longfor prices 1.5 bln yuan bonds at 3.3% (updated)

Midea Real Estate Holding

26/08/2022 04:57

(Adds CIFI, background)
    SHANGHAI, Aug 26 (Reuters) - Beijing-based developer Longfor
Group  0960.HK  said its 1.5 billion yuan ($219 million)
medium-term notes guaranteed by state-owned China Bond Insurance
Co Ltd had been priced at a coupon rate of 3.3%, the lower end
of an indicative range.
    The notes were oversubscribed by 2.86 times, market sources
told Reuters. Longfor, which was selling up to 1.5 billion yuan
three-year bonds at 3% to 4.3%, confirmed the news.
    Longfor's smaller Shanghai-based peer, CIFI Holdings
 0884.HK , is also planning to sell 1 billion to 1.5 billion
yuan of three-year medium-term notes in September at a range
between 3-4.5%, according to a term sheet seen by Reuters.
    The bonds will be guaranteed by China Bond Insurance, and
the proceeds will be used for project construction, as well as
onshore and offshore debt repayments, the term sheet shows. 
    CIFI did not immediately respond to a request for comment. 
    Chinese regulators have instructed China Bond Insurance to
provide guarantees for onshore bond issuance by a few private
property developers deemed to be financially sound, Reuters
reported last week.  urn:newsml:reuters.com:*:nL1N2ZS045   
    China Bond Insurance will provide "full amount,
unconditional and irrevocable joint liability guarantee" to
these bonds. The guarantee provides more protection than credit
risk management tools, market participants have said.
    The support from the state comes amid mounting concerns that
a deepening debt crisis and defaults in the sector could impact
developers that have been regarded as financially sound.
    But some of China's state-backed financial institutions are
pushing back on Beijing's calls to support the embattled sector
on worries it could hurt their balance sheets.  urn:newsml:reuters.com:*:nL8N2ZT3LD
 ($1 = 6.8559 Chinese yuan)

 (Reporting by Steven Bian in Shanghai and Clare Jim in Hong
Kong; Editing by Himani Sarkar)
 ((clare.jim@thomsonreuters.com;))