(Yicai) Feb. 20 -- Greentown China Holdings has unveiled a USD500 million offshore bond issuance plan, becoming the only Chinese property developer to do so in the past six months.

Greentown will issue a batch of three-year offshore US dollar senior notes in the aggregate principal amount of USD350 million and with an interest rate of 8.45 percent, the Hangzhou-based firm said in a filing to the Hong Kong Stock Exchange on Feb. 13. On Feb. 18, it announced the addition of USD150 million senior notes with the same term and interest rate.

"The company intends to use the net proceeds of the notes, after deducting commissions and other estimated expenses, to refinance its existing indebtedness," Greentown noted.

The last time a Chinese builder issued US dollar bonds was in July 2024. Since then, offshore bond financing channels have nearly closed, Liu Shui, corporate research director at the China Index Academy, told Yicai. Only a few high-quality real estate companies issued offshore bonds last year, and most of them were state-owned enterprises, he added.

State-owned engineering and construction giant China Communications Construction Group is Greentown's largest shareholder, with a 29 percent stake.

Since the Chinese property market began to decline in 2021, the financing environment for real estate companies has continued to tighten, leading to several of them defaulting on debts.

Against this backdrop, the market has been pretty optimistic about the overseas financing environment since Greentown announced the US dollar bond issuance plan.

"Since the second half of last year, some SOEs have begun to reconsider offshore financing, partly to expand their financing channels and partly based on their assessment of the US dollar trend," Shi Lulu, director of Asia-Pacific corporate ratings at Fitch Ratings, told Yicai.

However, the cost of issuing offshore bonds is significantly higher than domestic financing, which is why many firms that are financially capable of issuing offshore bonds are still observing and evaluating the situation, Shi added.

In fact, the interest rate on Greentown's new US dollar bonds is much higher than its average financing cost. According to data disclosed in the company's semiannual financial statement, Greentown's weighted average interest cost had declined to 4 percent in the first half of last year from 4.4 percent a year earlier.

Greentown expects its net profit to have plunged up to 50 percent last year, compared with CNY3.1 billion (USD426.7 billion) in 2023, according to the earnings forecast released by the company on Feb. 3.

In the six months ended June 30, Greentown’s net profit shrank 20 percent to CNY2 billion from a year earlier, with revenue rising 22 percent to CNY69.6 billion (USD9.6 billion).

Editors: Dou Shicong, Futura Costaglione