Investors ‘relieved and obviously very happy’ after Dalian Wanda unit issues first US dollar bond since Chinese developers’ debt crisis began

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Wanda Properties Global Company, a wholly-owned subsidiary of Dalian Wanda Commercial Management, the conglomerate’s property services arm, issued the two-year bond with a yield above 12 per cent on Thursday

‘Investors were very relieved and obviously very happy to see this turnaround in sentiment’ in China’s real estate sector, Credit Suisse says

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A Wanda Plaza in Beijing. Dalian Wanda Commercial Management is one of the largest commercial property holders in China, which owns and operates hundreds of Wanda Plazas across the country. Photo: Reuters

Yulu Ao

Published: 5:30pm, 13 Jan 2023Updated: 7:03pm, 13 Jan 2023

A unit of Chinese conglomerate Dalian Wanda Group has issued an 11 per cent US dollar bond valued at US$400 million, reversing market expectations about junk debt following a default crisis among indebted Chinese developers.

Wanda Properties Global Company, a wholly-owned subsidiary of Dalian Wanda Commercial Management, the conglomerate’s property services arm, issued the two-year bond with a yield above 12 per cent on Thursday. It released the note with an initial price guidance of 12.625 per cent, before finally pricing it with a yield of 12.375 per cent, according to a sheet seen by the Post.

The company received orders from investors totalling US$1.4 billion, said two sources familiar with the matter. Both Dalian Wanda Commercial Management and Dalian Wanda Group did not respond to requests for comment.

The senior unsecured notes will be unconditionally and irrevocably guaranteed by Dalian Wanda Group units Wanda Commercial Properties (Hong Kong), Wanda Real Estate Investments and Wanda Commercial Properties Overseas.

This is the first public US dollar bond issuance from a Chinese developer since a default crisis in late 2021, which had led to the panic selling of Chinese high-yield dollar bonds by investors. Beijing rolled out a series of rescue measures last November to support the country’s real estate sector, including supporting Chinese developers’ bond issuances.

“That’s what the market was waiting for a very long time,” said Terence Chia, head of debt capital markets syndicate for Asia-Pacific at Credit Suisse, which led the deal. “I think the investors were very relieved and obviously very happy to see this turnaround in sentiment for this sector.