Yuexiu Property offers up to RMB 2 billion of bonds in two parts

By William Gullotti

Buffalo, N.Y., June 8 – Yuexiu Property Co. Ltd.’s 95% owned subsidiary Guangzhou City Construction & Development Co. Ltd. is preparing for its third tranche of corporate bonds (Chengxin: AAA) under its approved application to sell up to RMB 9.4 billion of bonds, according to a notice on Thursday.

As with the company’s first and second tranches of corporate bonds, issued Feb. 21 for a total of RMB 1.9 billion and March 24 for a total of RMB 1.5 billion, respectively, the third tranche will also come in two parts.

Unlike the prior two tranches, the third tranche will consist of a fixed-rate five-year bond and a fixed-rate 10-year bond.

The coupon rate will be determined via the book building process.

The five-year bonds, as with previous offerings, will give the issuer the opportunity to reset the rate in the third year. On the reset date, the five-year bonds will be both callable and putable.

The 10-year fixed-rate bonds will not have a rate reset, also leaving off the call and put options.

Proceeds will be used to repay interest-bearing borrowings of the issuer and its subsidiaries.

Yuexiu is a property developer based in Hong Kong.

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