New carve-out in Chinese property bonds

Author: | Published: 2 Mar 2011

China SCE Property’s high yield issue has carved-out permanent offshore non-guarantor subsidiaries but included incurrence baskets slated for the same subsidiaries. Giving the issuer both rights sets the deal apart from other recent synthetic issuances by Chinese property developers.

In January the issuer and its subsidiaries entered an initial purchase agreement with Deutsche Bank and HSBC for the issue of Rmb 2 billion ($300 million), dollar settled 10.5% senior notes due 2016.

The offering arrived in the height of the offshore synthetics fad, which in light of China’s clamp down on inflation and remittance of funds in renminbi is increasingly ambitious. It follows...