Chinese property developer CIFI Holdings said on Friday it would issue HK$1.96 billion ($250.22 million) three-year convertible bonds for refinancing a bond maturing this month.
CIFI’s Hong Kong-listed shares dropped more than 13% in morning trading to HK$3.98, where the main Hang Seng Index eased 0.8%.
The Shanghai-based company is one of the few Chinese developers that could raise funds from the capital markets, as liquidity was nearly shut for them after defaults by China Evergrande Group and others rattled global markets.
“CIFI is one of the few private developers that remain active in the land market, indicating manageable liquidity and normal operations,” Iris Chen, an associate credit analyst at Nomura in Hong Kong, said.
The issues come as shares in a number of Chinese developers, including Kaisa Group, Sunac, China Aoyuan and Shimao Group, announced a suspension of trading in Hong Kong from April 1.
CIFI’s conversion price of the 6.95% bond due April 2025 is HK$5.53 per share, 20% higher than Thursday’s closing price. If the bonds are fully converted, the shares represent 3.87% of the enlarged capital.
The company said in a filing it plans to use the proceeds for refinancing, including upcoming redemption of a 6.70% dim sum bond due on April 23 with an outstanding 1.5 billion yuan ($236.29 million).
Dim sum bonds are bonds issued outside of mainland China but denominated in yuan.
- Reuters, with additional editing by George Russell
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