China Properties Plans Dollar Bond as Builders Return for FundsRachel Evans
China Properties Group Ltd. is considering a sale of U.S. dollar-denominated notes after an issue by Central China Real Estate Ltd., as builders in the mainland and Hong Kong more than double offerings from April.
China Properties will meet investors in Hong Kong on May 27 and in Singapore on May 28, a person familiar with the matter said, asking not to be identified because the details are private. Central China sold 57 percent of its five-year notes, which pay 6.5 percent, to funds, a separate person said today.
Real estate companies from China and Hong Kong have sold $1.9 billion of bonds in May, more than double offerings last month. They issued a record $13.5 billion in the first quarter, data compiled by Bloomberg show. Central China Real Estate received almost four times more orders than the number of securities available for $400 million of notes yesterday, according to the data.
It still makes sense for developers to sell bonds, according to Annisa Lee, a credit analyst in Hong Kong at Nomura Holdings Inc. “Most developers have already come to the market but there might still be some smaller ones looking.”
The cost of insuring Asia-Pacific corporate and sovereign bonds from non-payment meanwhile increased, according to traders of credit-default swaps.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan rose 1 basis point to 103 basis points as of 8:44 a.m. in Hong Kong, according to Australia & New Zealand Banking Group Ltd. The measure is on course for its highest close since May 15, according to data provider CMA.
India’s Canara Bank is also considering selling dollar bonds, according to a person familiar with that matter. The lender hired banks to arrange a series of investor meetings in Singapore, Hong Kong and London from May 27, the person said.
The Markit iTraxx Australia index gained 0.5 of a basis point to 101 as of 10:46 a.m. in Sydney, Westpac Banking Corp. prices show. The benchmark has fallen 5 basis points this month, according to Westpac and CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market.
The Markit iTraxx Japan index climbed 2 basis points to 76.5 basis points as of 9:33 a.m. in Tokyo, Citigroup Inc. prices show. The gauge, which has ranged from 74 basis points to 148.1 basis points this year, is set for its first increase this week, according to CMA.
Credit-default swap indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
The swap contracts pay the buyer face value in exchange for the underlying securities if a borrower fails to meet its debt agreements.