After the crisis in the Chinese real estate sector, Seazen tests the market with a bond issue in dollars

HONG KONG, May 30 (Reuters) – Seazen Group Ltd (1030.HK) plans to issue a U.S. dollar bond, according to a term sheet, becoming one of the few Chinese property developers this year to test investors’ appetites. investors for a sector in the throes of a debt crisis.

There has been little activity in corporate bonds from Chinese property developers after much of the industry was gripped by a liquidity crunch last year.

The credit crunch, triggered by tighter debt cap rules, pushed some developers such as China Evergrande Group (3333.HK) into default, shaking investor confidence in the sector, which accounts for around a quarter of the total economic output of the country.

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Shanghai-based Seazen will issue a 364-day green bond with an expected yield of 7.95%, according to a term sheet seen by Reuters.

The company said in a filing on Monday that it would guarantee the greenbacks its New Metro Global Ltd unit had offered to issue, but gave no details. Seazen did not immediately respond to a request for comment.

Greentown China Holdings Ltd (3900.HK) and the state-backed Sino-Ocean Group Holding Ltd (3377.HK) sold dollar bonds with letters of credit this year. Greentown also issued notes worth $150 million which were combined with a 2020 issue.

Seazen intends to use the proceeds to refinance medium- and long-term offshore debt due within a year as well as for green projects, according to the term sheet which also showed Haitong International as the sole adviser. .

Seazen has $400 million in notes maturing in June and another $400 million due in August and September, according to Refinitiv data.

Citing weakening sales, a weaker cash reserve and limited access to funding, Moody’s this month downgraded its corporate family rating for Seazen debt from Ba2 to Ba1, and its senior unsecured rating secured. on bonds issued by New Metro Global at Ba3 from Ba2. He put everything on trial for a new downgrade.

Shares of Seazen fell 0.6% on Monday, while the Hang Seng Mainland Properties Index (.HSMPI) was virtually flat.

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Reporting by Scott Murdoch; Written by Clare Jim; Editing by Christopher Cushing and Edwina Gibbs

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