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China South City Announces Successful Closing of US$250 million Senior Notes Due 2016

China South City Holdings Limited
2011-01-17 08:45 1047

Greater China’s First USD bond in 2011

HONG KONG, Jan. 17, 2011 /PRNewswire-Asia/ -- China South City Holdings Limited (stock code: 1668.HK), a leading developer and operator of large-scale, integrated logistics and trade centers in China, today announced the successful completion of a US$250 million Senior Notes (the “Notes”) offering. The Notes bear a coupon of 13.50% per annum and will mature in 2016.

The first USD bond to issue from Greater China this year was oversubscribed and was greeted with positive market response during initial trading. Anticipating a wave of bond offerings from Chinese firms coming on to the market in the coming weeks, the issuance of the Notes was strategically timed to capture positive market interest at the start of year when investors are still actively looking at readjusting the asset allocation of their portfolios.

A strategically timed site visit for potential investors was arranged which successfully generated positive feedback and interest and led to the participation of more than 90 institutional investors during the book building period. The Notes have already been distributed to subscribers who are primarily fund and asset managers and private banks in Asia and Europe. On the back of positive market response, the Notes were priced lower than initial pricing whisper.

The Notes will mature on 14 January 2016 and bear interest from and including 14 January 2011 at the rate of 13.50% per annum, payable semi-annually in arrears.

The Notes have been provisionally rated “B” by Standard and Poor’s Rating Services and “B2”by Moody’s Investors Service. The Notes have obtained in-principle approval to be listed on the Official List of the Singapore Stock Exchange (SGX-ST).

The estimated net proceeds of the Notes Issue, after deduction of underwriting discounts and commissions and estimated offering expenses, will amount to approximately US$235.2 million. The proceeds will be used primarily for the funding of the China South City’s existing and future property developments (including land grant fees) and for other general corporate purposes.

Mr Stephen Fung, Chief Financial Officer of China South City, said “We are pleased with the encouraging market response to the issuance of the Senior Notes. This is another testament to the success of China South City’s business development and profitability. The proceeds raised through the Notes issue will significantly strengthen our financial position and broaden our financing channels. With more than HK$4.6 billion cash on hand and the further enhanced financial strength, we believe we are in a great position to drive the rapid development of our business and create better returns for investors going forward.”

Currently, the properties of China South City which are under development include: Phase Three of China South City Shenzhen, Phase One of China South City Nanning, Phase One of China South City Nanchang and Phase One of the Heyuan project.

BOC International and UBS are the joint lead managers and joint bookrunners for the Notes Issue.

Source: China South City Holdings Limited
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