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Bond Market News
Longfor Unit Lining Up Third State-Backed Local Bond; Sino-Ocean and CIFI Seek Local Bond Extension
August 23, 2023
Chongqing Longhu Development, a unit of Chinese property developer Longfor, is said to be lining up an RMB 1.1bn ($153mn) bond issuance backed by state-owned China Bond Insurance, as per people familiar with the matter, reported by Bloomberg. The source further added that the proposed bond will have a 3-year tenor and a coupon guidance of 3.0-3.8%. This comes close on the heels of Longfor reporting an improvement in its 1H earnings late last week. The developers’ dollar bonds continued to move higher on Tuesday – its 3.95% 2029s rose over 3 points to 54.4 cents on the dollar.
In related Chinese property news, Sino-Ocean and CIFI are said to be seeking an extension on their local currency bonds. Sino-Ocean is organizing a bondholders’ meeting at the end of this month in relation to a RMB 2bn ($278mn) bond originally due on August 2. As per Bloomberg, the developer is planning to extend principal repayments through August 2024 as it does not expect to be able to repay before the end of the 30-day grace period. Further, Sino-Ocean is said to propose pledging revenue rights attached to equity interest in a Beijing property company.
Meanwhile, CIFI is seeking bondholder consent to extend maturity of its 3.9% local currency bond due 2025, by one year to 2026. As per Bloomberg, the puttable bonds have an early repayment date of September 14 and an amount outstanding of RMB 1.875bn ($261mn). Further, the developer has proposed repayment via installments starting next month and a two-month grace period.
Sino-Ocean and CIFI’s dollar bonds are currently trading at deep distressed levels of 9-10 cents on the dollar.
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