Chinese bond rush kicks off the year

Chinese property developers have descended on the dollar bond market like panhandlers in a gold rush. How long will investors accept structures that might come back to haunt them?
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Chinese developers are piling into the bond market to finance their new projects, like this one in Beijing (AFP) </div>
<div style="text-align: left;"> Chinese developers are piling into the bond market to finance their new projects, like this one in Beijing (AFP) </div>

When Estella Ng, chief financial officer of Guangdong-based property developer Country Garden, turned her eye to the bond markets early this year, she saw an opportunity for the company to strike first and take advantage of abundant liquidity.

Unlike past years, when the bond markets were opened by sovereign or blue-chip borrowers such as the Republic of the Philippines, Hutchison Whampoa, or Export-Import Bank of Korea Kexim, in 2013, it was the bellwether Chinese developer, along with its smaller peer, Kaisa, that set the ball rolling.

Country Garden, one of the biggest mainland developers and majority-owned by Yang Guoqiang, one of China’s richest people, embodied all...

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