(Bloomberg) -- Country Garden Holdings Co., China’s largest developer by sales, raised HK$3.9 billion ($500 million) in a convertible bond sale amid a spreading crisis in the real estate sector.
The Foshan-based company sold the bond due 2026 with a 4.95% coupon, according to a Hong Kong exchange filing Friday. The proceeds will be used to refinance offshore debt that will become due within a year.
Shares and bonds of Country Garden were hammered last week on fears that a reportedly failed fundraising effort may be a harbinger of waning confidence. Country Garden had been one of the few remaining big, better-quality private developers largely unscathed by the liquidity crunch, as peers such as Shimao Group Holdings Ltd. saw dramatic reversals in their credit ratings.
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Country’s Garden’s dollar bonds rose on Friday morning while its stock opened lower. Its 3.3% dollar note due 2031 climbed 2.6 cents to 80.8 cents, set for the highest in more than two weeks, Bloomberg-compiled prices showed as of 9:28 a.m. in Hong Kong. The shares fell as much as 5% following a three-day, 19% jump from their lowest level since 2017.
Country Garden set the initial conversion price at HK$8.10 per share, representing a premium of 16% to its Thursday close. Its shares dropped last week following an IFR report that the firm failed to win sufficient investor support for a possible convertible bond deal.
The developer also said its 7.125% note due Jan. 27 will be repaid at maturity with internal resources. Including that, it has $1.1 billion of dollar bonds due this year, compared with about $29 billion of available cash as of last June, according to data compiled by Bloomberg.
(Updates with bonds and stocks in fifth paragraph. An earlier version was corrected to remove an erroneous reference to yuan.)
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