The head of one of China’s largest real estate developers bought over half of the $1.8 billion raised in dollar-bonds by one of the company’s units, agreeing to pay yields as high as 13.75%.
Hui Ka Yan bought the securities as a sign of “support” and “confidence” in his company’s outlook, reports the Wall Street Journal.
Evergrande held Rmb 671 billion ($96 billion) in outstanding debt at the end of June, which will be partly refinanced by the latest bond offering.
The developer’s problems are not unique among China’s largest companies. Many heavily-indebted nationwide firms are growing fearful of a liquidity crunch as financing channels dry up in a slowing economy.
To reduce the risk of corporate defaults, companies are turning to US bonds as an oasis of funds, but are having to pay lofty premiums to attract investors.