Investors Cheer as Seazen Plans First Offshore Bond by Private Chinese Builder Since Credit Crunch, Report Says(Yicai) June 10 -- Shares of Seazen Group surged after the property developer was reported to be planning to issue between USD250 million and USD300 million in US dollar bonds, marking the first overseas bond issuance by a Chinese private real estate firm in recent years, following a prolonged industry credit crunch.
Seazen [HK: 1030] closed 7.2 percent higher at HKD2.24 (US 30 cents) in Hong Kong today, representing a nearly 23 percent year-to-date uptick. Other mainland-based developers listed in Hong Kong also saw gains. China Jinmao Holdings Group [HK: 0817] moved up 3.8 percent to HKD1.10, while Greentown China Holdings [HK: 3900] rose 2.3 percent to HKD9.62.
Shanghai-based Seazen is moving forward with the dollar bond issuance and has selected four underwriters: Guotai Junan International, Haitong International, Citigroup, and Citic CLSA, The Paper reported today, citing a source familiar with the matter.
Since the Chinese real estate sector entered a downturn in 2021, many developers have defaulted on their debt, damaging their credit ratings and cutting off access to overseas financing. Only a few state-backed developers have successfully issued offshore bonds since then.
Before Seazen, only one Chinese developer has tapped the offshore bond market this year. In February, Greentown, backed by state-owned China Communications Construction, issued two senior notes totaling USD500 million, with an annual interest rate of 8.45 percent.
A successful issuance by Seazen would send a positive signal to the market, helping to improve international investor sentiment toward Chinese private real estate firms. It could give quality companies greater flexibility to survive and grow, analysts told The Paper.
Founded in 1993, Seazen primarily develops residential properties and operates commercial plazas. According to its latest annual report, the firm’s net profit fell 44 percent year-over-year to CNY491 million (USD68.3 million) last year, while revenue declined 25 percent to CNY89.2 billion (USD12.4 billion).
Editor: Emmi Laine
