Country Garden sells $550 million of high-yield bonds

The issue attracts strong demand, but convertible bondholders choose to hold on to their Country Garden paper, leaving the simultaneous CB tender with an acceptance rate below 20%.

What looked like a disappointing capital management exercise on Wednesday when Country Garden announced that less than 20% of its outstanding convertible bond had been tendered by the holders, turned into triumph last night as the company managed to sell $550 million of new high-yield bonds.

The main purpose of the seven-year bond was to fund the CB tender, which, as it turned out, could have been achieved with a much smaller issue size. However, given the favourable market conditions for new issuance and the strong investor appetite for quality names, the Chinese real estate developer chose to go for a benchmark-size issue even though the CB tender attracted only $114 million worth of bonds,...

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