Greenland bond clarifies new China onshore guarantees

Author: Ashley Lee | Published: 9 Jul 2014

Real estate developer Greenland Hong Kong sold the first bond under Safe’s new onshore guarantee regulations. More guaranteed deals are expected to follow.

Greenland sold $1 billion in bonds under Regulation S on June 25, split into $400 million in five-year bonds with a 4.375% coupon and $600 million in ten-year bonds with a 5.875% coupon. In its debut offering last October the company paid a coupon of 4.75% for three-year bonds supported by a keepwell deed and an equity interest purchase undertaking (EIPU).

The successful use of the State Administration of Foreign Exchange’s (Safe) new registration process for offshore bond guarantees gives additional comfort to investors, who previously relied on keepwell deeds, EIPUs and, more recently, liquidity support facilities. These features are credit enhancements...