Country Garden to launch $1.5 billion bond

The Chinese property developer mandates banks to arrange its benchmark bond, while other issuers also prepare to come to market.
The bond pipeline for the coming weeks is building, with Chinese real estate developer Country Garden due to launch a 144A, Reg-S offering of at least $1.5 billion. Seven banks have been mandated on the deal which is expected to have tranches of five- and ten-years, namely Bank of China, Citi, Deutsche Bank, HSBC, JPMorgan, Morgan Stanley and UBS, with the latter two acting as joint global co-ordinators.

The roadshow will begin today in Hong Kong and Singapore, and then move to London, New York, Boston, before ending in Los Angeles on November 6. The funds will allow the company to repay a six-month loan from Bank of China, and meet capital needs for its existing and new projects.

Country Garden enjoys a leading market position and focuses on building integrated townships in suburban China, allowing it to offer affordable products to a growing middle-income group. However, since its highly successful IPO in April 2007, Country Garden has increased its land bank size by almost three times and is forecasting sales for the next few years to grow at a rate higher than its average historical compound growth rate for the last four years, according to MoodyÆs. This rapid and projected growth could exert stress on its management and operational teams, states the credit rating agencyÆs report.

Yesterday evening, Wharf Finance Limited (BBB, A-) priced a 10-year $400 million deal via HSBC and UBS at 173.5bp over 10-year Treasuries, equivalent to 110bp over mid-swaps. (See Pricing Terms on FinanceAsia's homepage û editorial comment to follow tomorrow).

Rain Calcining of India, which is AsiaÆs largest manufacturer of calcined petroleum coke, is due to come to market after the FOMC meeting on October 31 with a $235 million deal via sole bookrunner Citi. And then SingaporeÆs United Test and Assembly Centre, a chip tester and assembler, is also due to price an eight-year dual-tranche $475 million high-yield bond on November 2.

ôThe FOMC decision will dominate the week in credit trading, which in Asia begins on a cautiously optimistic note. Earnings season is winding down on record results and encouraging prospects,ö says Brett Williams in a credit report from BNP Paribas. Credit spreads in Asia have proved resilient to the turmoil in G3 markets.

More deals from Korea are expected to hit the market in the coming weeks with Korea Development Bank due to price a $500 million-$1 billion deal via Citi, Depfa Bank, Deutsche Bank, Goldman Sachs and HSBC. Kookmin Bank has mandated Barclays, Citi and Merrill Lynch for a $300 million transaction. Merrill Lynch has also been selected for WooriÆs benchmark deal along with Credit Suisse and Woori Securities. SK Energy (rumoured to have mandated Goldman Sachs and Morgan Stanley) and Hyundai Capital Services are also expected to launch dollar-denominated transactions.

Meanwhile, IndonesiaÆs PT Bank Mandiri is due to offer a $300 million bond in late November via Barclays, Deutsche Bank and Bank Mandiri Sekuritas; and Chinese property developer Coastal Greenland is anticipating a benchmark bond-with-warrants transaction.

On the sovereign front, market observers are still eagerly awaiting VietnamÆs sovereign $1 billion deal managed by Citi, Deutsche Bank and Barclays.
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