Shimao reopens bond market for junk-rated companies

Hong Kong

SHIMAO Properties has become the first Chinese property developer to launch a high-yield bond since the sector was rocked by problems at Kaisa Group.

Shimao attracted a US$6 billion order book within hours of launching its seven-year bonds on Tuesday. However, the indicated yield of about 8.5 per cent is estimated to be 100 basis points higher than what it would have paid in early December, suggesting the sector is set for significantly higher funding costs.