mystery-surrounds-hong-long-bond-pricing

Mystery surrounds Hong Long bond pricing

The Chinese property developer suspends trading of its shares, fuelling speculation that its long-awaited bond transaction may have priced yesterday afternoon.
Chinese property developer Hong Long yesterday suspended the trading of its shares pending the announcement of a deal comprising $90 million five-year 12.5% senior notes and 81 million warrants, according to the Hong Kong Stock Exchange website.

As a result, market sources say the deal may have priced yesterday afternoon. However, bankers involved in the transaction declined to comment, with Citi reportedly even refusing to share the details of the trade, or indeed whether it had priced, with joint lead manager Lehman Brothers.

The deal, which has been in the pipeline since July, reportedly succeeded in garnering only $60 million in demand earlier this week for what bankers had marketed as a $100 million offering.

ôThe terms of the deal were great,ö says one investor, ôbut there are clearly still liquidity problems that have hindered the transaction getting done. Also, Chinese property is an unpopular sector, suffering from an overhang of supply. ItÆs possible that they gave it away very cheap, and are therefore unwilling to release the terms of the trade."

Hong Long initially planned to issue a $200 million bond in July. Following the unravelling of subprime crisis, the company postponed its offering, announcing this month it would add a sweetener in the form of warrants to attract investors to the credit. This follows in the steps of Chinese property developer Neo-China Holdings, which implemented a similar strategy to pull off a high-yield deal in rocky markets in July.
¬ Haymarket Media Limited. All rights reserved.

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team subscription (2-5 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at [email protected], or +(852) 2122 5222