Short-Term USD Note Sales Won’t Bolster Credit Profiles: Lucror

Selling short-term dollar bonds may be a way to help some Chinese companies repay debts coming due, but its ‘very temporary” in nature and hardly provides robustness to their debt maturity profiles, says Charles Macgregor, head of emerging markets at Lucror Analytics in Singapore.

"The issuers are not really receiving a lot of benefit as it is costly given upfront fees and refinancing will have to be organized in advance," he says.

NOTE: Greenland Holding and Hainan Airlines are both pricing dollar short-term notes of less than one year maturity today.

Greenland Holding’s $300m 4.3% 2017 note is due in Sept., while its $500m 3.5% 2017 bond matures in Oct: Bloomberg- compiled data.

Greenland Holding and Modern Land China issued dollar notes in May that mature in just under a year, Bloomberg-compiled data show.

"Not many fixed income investors would look at these as good for portfolios other than as a short term placement of excess cash," Macgregor says.

Related stories:

- China developers facing tighter funding mull shorter bonds

- China NDRC said to withhold builder, LGFV offshore bond plans

Bloomberg News
June 15, 2017, 10:05:19 GMT

Reporting by Carrie Hong; Editing by Neha D'silva, Chan Tien Hin