Greenland Global Investment Ltd. sold the first bonds of China with a new cross-border guarantee. The debt, guaranteed by Greenland Holding Group Co., includes $400 million of notes due in 2019 at 285 basis points more than Treasuries and $600 million of 10-year debentures at a spread of 341.2 basis points, reports Bloomberg.
The new rules, effective since June 1, may be used by other Chinese companies with substantial investments abroad.
“These new bonds for Greenland mean that the structure of its previous notes are weaker,” said Raymond Chia, the Singapore-based head of credit research at Schroder Investment Management Ltd. “With these new types of guarantees, we expect supply for Chinese corporates to increase even further.”
The new debt is credit positive for Greenland Group as it should enable the issuer to lower its funding costs, according to Moody’s.
Greenland Global Investment Ltd. sold the first bonds of China with a new cross-border guarantee. The debt, guaranteed by Greenland Holding Group Co., includes $400 million of notes due in 2019 at 285 basis points more than Treasuries and $600 million of 10-year debentures at a spread of 341.2 basis points, reports Bloomberg.
The new rules, effective since June 1, may be used by other Chinese companies with substantial investments abroad.
“These new bonds for Greenland mean that the structure of its previous notes are weaker,” said Raymond Chia, the Singapore-based head of credit research at Schroder Investment Management Ltd. “With these new types of guarantees, we expect supply for Chinese corporates to increase even further.”
The new debt is credit positive for Greenland Group as it should enable the issuer to lower its funding costs, according to Moody’s.
The Markit iTraxx Asia index of 40 investment-grade borrowers outside Japan was little changed at 101 basis points as of 8:37 a.m. in Singapore, Australia & New Zealand Banking Group Ltd. prices show. The measure is poised to fall 6 basis points this month after a 19.7 basis-point drop in May, the biggest monthly decline since February, according to data provider CMA.
The indexes are benchmarks for insuring bonds against default and traders use them to speculate on credit quality. A drop signals improving perceptions of creditworthiness, while an increase suggests the opposite.
