China’s Country Garden issues $440 mln ABS backed by contract receivables

Jan 14 China’s fourth biggest developer by sales Country Garden said on Thursday its subsidiary has packaged part of its contract receivables rights and issued 2.9 billion yuan ($440.2 million) worth of asset-backed securities (ABS), the first-of-its-kind in the industry.

The securities were issued to qualified investors at an interest rate of 5.1 percent with tenure of four years, the Guangdong province-based company Country Garden said, adding that the securitisation is the largest in size and the longest in tenure so far in China property sector.

China’s property developers returned to the asset securitisation market last year after a three-year absence, prompted by lighter rules on how they can package and sell future cash flows to raise funding.

Shimao Property Holdings has packaged in August its future management fees into an asset-backed securitisation worth 1.5 billion yuan ($243 million).

Country Garden has been raising funds through different refinancing channels since last year. It has recently issued 115 million Malaysian ringgit ($26.20 million) Islamic medium term notes in December and a total of 10 billion yuan of public and private onshore corporate bonds.

It is considering issuing yuan-denominated bonds sold by overseas entities on the mainland, known as panda bonds. ($1 = 6.5881 Chinese yuan renminbi) ($1 = 4.3900 ringgit) (Reporting by Clare Jim; Editing by Sherry Jacob-Phillips)