Chinese developer Seazen Group Ltd plans to issue an offshore 364-day green bond of an undetermined size with interest rate guidance of 7.95%, according to a term sheet.
The issue will be one of the first by a Chinese developer this year in a US dollar bond market amid concerns about the health of the property sector after a series of defaults and bond exchanges designed to extend payments.
State-backed Greentown China Holdings Ltd and Sino-Ocean Group Holding sold dollar bonds earlier this year but with credit enhancement, while the former also issued $150 million notes that were combined with a 2020 issue.
Shanghai-based Seazen, in a filing to Hong Kong’s stock exchange on Monday, said it will guarantee green notes proposed to be issued by unit New Metro Global Ltd. It gave no details of the notes.
Proceeds To Refinance Debt
The developer said it intends to use proceeds for refinancing existing mid-to-long-term offshore debt due within one year, as well as for eligible green projects.
Seazen has $400 million worth of notes maturing in June, and a total of $400 million due in August and September, Refinitiv data showed.
Haitong International is the sole adviser for the new issuance, the term sheet showed.
Moody’s earlier this month downgraded its corporate family rating (CFR) of Seazen debt to Ba2 from Ba1, and its backed senior unsecured rating on bonds issued by New Metro Global to Ba3 from Ba2. It put all on review for further downgrade.
The credit-rating firm cited weakening sales, lower liquidity buffer and constrained funding access.
Seazen’s share price fell 1.2% in late morning trade, versus a flat Hang Seng Mainland Properties Index.
- Reuters with additional editing by Sean OMeara