Renhe prints bond with 13% semi-annual coupon

After two weeks of speculation about whether or not Renhe Commercial Property Holdings would return to the international bond markets, the Chinese property company priced a $300 million five-and-a-half year security with a 13% semi-annual coupon last Thursday evening -- less than four months after its last deal.

Rumours of a Renhe transaction initially surfaced in early August amid a flurry of property developers looking to come to market, including Country Garden and KWG Property. Facing an investor base that has had its fair share of high-yield property bonds to choose from this year, neither Country Garden's nor KWG Property's aftermarket performance matched analyst expectations.

However the performance of Chinese property bonds strengthened last week by a quarter to half a percentage point a day, and Renhe was able to take advantage of the more positive backdrop as well as a thin supply of bonds during the week to achieve a better launch than its peers.

“They picked the right window,” said one banker, “and there was a good rally the night before they priced.”

This helped attract a reasonable amount of interest for the high-yield credit, with a final order book of $600 million and demand from just over 100 accounts.

The Ba2/BB rated senior notes were re-offered at par to yield 13% and will mature on March 10, 2016. They were issued in the 144A/Reg-S format, which one source said was a part of Renhe’s marketing strategy to attract more London- and New York-based investors.

However, Renhe was only able to sell 20% of the bonds into Europe and 8% into the US. The rest of the bonds were bought by Asia-based accounts.