Haitong Securities

A number of sub-investment grade rated property developers and local government financing vehicles (LGFVs) used private-style executions for their public transactions this week — an increasingly popular approach among Chinese bond issuers.

Babytree Group has bagged HK$1.7bn from its IPO after pricing it at the bottom of guidance amid volatility in equity markets.

Spreads on Chinese property dollar bonds felt the impact of heavy supply on Monday when three companies, Times China Holdings, Greenland Holding Group and China Evergrande Group, brought new issues to the market.

A flurry of Asian bond issuers have ventured out in a bid to wrap up deals ahead of the Thanksgiving holiday in the US on Thursday, even as markets remain on shaky ground.

Hong Kong IPO hopefuls Babytree Group and Tongcheng-Elong Holdings announced deals drastically smaller than their initial targets this week. But despite the clear sign of trouble in the market, a few more Chinese companies are considering pushing ahead with their own listings before the end of the month. Jonathan Breen reports.

China’s Babytree Group has thrown open books for a potential HK$2.2bn ($280.9m) IPO, paring down the size from its original $800m target, according to a banker close to the deal.

Online travel service provider Tongcheng-Elong Holdings is set to launch a truncated Hong Kong IPO on Tuesday after key comparable Ctrip’s stock price collapsed amid volatility last week, according to a source close to the deal.

Chinese technology giant Baidu grabbed $1bn from a bond on Thursday, while a local government financing vehicle (LGFV) in Hunan raised $300m from a deal that was less than twice covered at its peak.

Chinese local government financing vehicle Chengdu Hi-Tech Investment Group Co and real state company Jiayuan International Group both relied on anchor interests for their dollar bonds on Tuesday.

A local government financing vehicle (LGFV) and a single-B rated property developer decided to take risk off the table on Tuesday, ahead of the US mid-term election and when markets such as Singapore are closed for a public holiday.

China National Bluestar (Group) Co paid a handsome new issue premium for a $300m senior perpetual bond amid weak sentiment for the structure, as its deal caused a widening in the broader Chinese senior perp market.

Avic International Leasing Co netted $350m on Tuesday from a three year bond, opting for a slightly different pricing strategy by starting the deal at a relatively tight guidance.