Hong Kong-listed Chinese developer Seazen Group is in talks with state-owned China Bond Insurance Co. Ltd. for a new guaranteed onshore bond issue, according to three sources familiar with the matter.
The company is aiming preliminarily to raise CNY 1.5 billion ($211.9 million) from the issue, and expects to obtain the guarantee letter from China Bond Insurance as early as the end of September, said two of the sources familiar.
Size and terms of the proposed bond issuance is not final and subject to changes, sources said.
The National Association of Financial Market Institutional Investors provides credit enhancement for bond issues via China Bond Insurance. Developers have issued
domestic bonds with China Bond guarantees since 2022 as part of China’s post-Covid efforts to give real estate companies liquidity support.
Seazen’s onshore subsidiary Seazen Holdings have issued several tranches guaranteed bonds including most recently in May
CNY 1.36 billion dual-tranche medium-term notes, with one CNY 800 million 3.2% three-year series and one CNY 560 million 3.4% five-year series. Part of proceeds from the May issue were for repaying the company’s interest-bearing debts and the group’s offshore bonds, developing residential real estate projects, and the remaining were used as working capital.
Hong Kong-listed Seazen Group has one more tranche of offshore notes maturing this year - the $450 million 4.8% notes due Dec. 15 - after repaying its $250 million 6% notes due Aug. 12 and the $100 million 7.95% notes due May 20, as
reported.
The company’s $450 million 4.8% due Dec. 15 notes were indicated around 91/ 92 today, Sept. 20, up half a point, according to two buysiders.
Management of Seazen said during its annual
shareholder meeting on May 29 that the company plans to use secured onshore financings including operating property loans and China Bond Insurance-guaranteed bonds to help repay its about $1.7 billion offshore notes as it endeavors to address debt maturities.
Seazen did not respond to requests for comment as of press time.