Poly Developments Explores 12 Billion Yuan Convertible Bond Sale
Poly Developments and Holdings Group, China's largest builder by contracted sales, is considering a 12 billion yuan ($1.7 billion) convertible bond sale as an alternative to the previously announced private placement of shares. This reflects a growing trend in Asia, particularly in the wake of a surge in Chinese equities, where companies raised over $9 billion in May through these securities, including major contributions from Alibaba, JD.com, and Lenovo. The move by Poly stands out in the cautiously emerging Chinese real estate market, buoyed by policy support. The company is actively gauging investor interest for the bond offering, with an annual coupon expected to range between 3% to 3.5% for a six-year term.
Key Takeaways
- Poly Developments and Holdings Group is contemplating a 12 billion yuan convertible bond sale as an alternative to a previously planned private share placement.
- Recent Asian activities in this sector, with notable contributions from Alibaba, JD.com, and Lenovo, have seen over $9 billion raised through convertible securities.
- The potential offering by Poly occurs within a cautiously recovering Chinese real estate market supported by policy measures.
Analysis
Poly Developments' potential convertible bond sale, amidst a cautious real estate recovery, reflects a strategic shift towards alternative financing influenced by global trends and recent successes of tech giants like Alibaba and JD.com. This move aims to capitalize on rising investor confidence and could potentially reshape the funding landscape of the real estate sector.
Did You Know?
- Convertible Bond Sale: This type of debt security can be converted into the company's equity shares at predetermined times during the bond's life, offering investors the chance to participate in the company's growth.
- Private Placement: This refers to a securities offering that is not made to the general public and is less regulated than a public offering.
- Annual Coupon: This refers to the interest paid to the bondholder by the issuer and is usually a fixed percentage of the bond's face value.