(Yicai Global) Nov. 20 -- Chinese real estate developers are issuing bonds to find funds amid the government's tightening scrutiny over borrowing money. Some of the latest of them are Evergrande Group's affiliates.
Scenery Journey, Hengda Real Estate, Tianji Holding and the subsidiary guarantors entered into a purchase agreement with China CITIC Bank International, China Everbright Bank International and Haitong International Securities Group regarding additional notes worth USD1 billion, the Shenzhen-based property firm said in a statement yesterday.
Chinese real estate companies' debt instruments reached CNY484.4 billion (USD69.8 billion) as of October, which was almost 30 percent more than last year, according to Chinese financial data provider Wind. In July, the government limited the use of borrowed money to finance new projects.
The latest bonds that Evergrande's affiliates issued have an annual interest rate of 11 percent and they will mature in 2020. These funds will be used to refinance existing offshore debts, which is allowed according to the new rules.
This is the second time the realty firm issues bonds this month. The previous USD565 million worth of notes was launched on Nov. 6 and those also have an interest rate of 11 percent and expire in 2020.
Scenery Journey would offer USD1.8 billion senior notes on Nov. 6, and Evergrande's Chairman Xu Jiayin would subscribe to USD1 billion of them, Evergrande announced on Oct. 31.
Editor: Emmi Laine