The Evergrande Real Estate Group, China’s third-largest property developer by sales, has sold $3 billion of offshore bonds in the hopes of easing capital pressure and reducing debt, reports Caixin.
As one of the industry’s most indebted companies, proceeds from the sale were reported to be predominantly put towards redeeming existing bonds and supplementing operational spending. The bond issues were in three tranches with maturities ranging from one to three years with yields set between 6.25% and 8.25%.
The company’s semi-annual report showed that the group had RMB 671.1 billion ($99 billion) of debt as of June 30, 44% of which would be due within a year.
The latest bond sales will help improve Evergrande’s short-term liquidity as the company holds a large amount of entrusted and trust loans, which often have short maturities, rating firm S&P Global Ratings said Tuesday, adding however that Evergrande’s liquidity would only be able to “marginally” cover its needs for the next 12 months.