Sunac China unit talks first tranche bonds at 3½%-5½%, 4.2%-6.2%

By Marisa Wong

Morgantown, W.Va., Aug. 13 – Sunac China Holdings Ltd. announced that wholly owned subsidiary Tianjing Sunac Zhidi Co., Ltd. plans to offer RMB 3 billion of non-guaranteed bonds with an over-allotment option for RMB 3 billion of additional bonds.

These first tranche bonds will consist of two types. The company plans to issue RMB 2 billion of type 1 bonds and RMB 1 billion of type 2 bonds.

Type 1 bonds will have a term of five years and include an option to increase the coupon rate after the end of the third year as well as a put option. Type 2 bonds will also have a term of five years.

The coupon for the type 1 bonds will be in the range of 3½% to 5½%, and the coupon for the type 2 bonds will be between 4.2% and 6.2%. The final interest rates will be determined through a book-building process.

Shenwan Hongyuan Securities Underwriting Sponsor Co., Ltd. will act as lead underwriter, and China Securities Co., Ltd. will act as joint underwriter for the issuance.

The offer period will run from Aug. 14 to Aug. 17.

As previously announced, the China Securities Regulatory Commission approved Sunac’s proposed issuance of up to RMB 6 billion of domestic corporate bonds earlier this month.

The company had said it plans to offer the bonds in tranches, with the first tranche to be completed within 12 months and the remaining tranches to be completed within 24 months.

Sunac is a Tianjin, China-based residential and commercial property developer.

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