Guangzhou City Construction & Development Co. Ltd., or GCCD, a unit of Hong Kong-based real estate development company Yuexiu Property Co. Ltd., will issue on a one-off basis trust loans of up to 1.15 billion yuan to sister company Guangzhou Yuexiu Property Development Co. Ltd. through an unnamed third party.
The amount will be issued through prioritized and subordinated asset-backed securities, which will be listed on the Shanghai stock exchange. A no-objection letter was received from the listing body, the company said in a March 13 release.
The securities will be issued for nine years, with the issue size capped at up to 1.11 billion yuan for the prioritized class, to be offered to institutional investors, and up to 39 million yuan for the subordinated class, to be subscribed by GCCD.
Guangzhou Yuexiu and seven property management companies will pledge the earnings from 45 property projects for the loans.
Proceeds from the issuance will be used to improve the financing structure of Yuexiu Property Co., to strengthen its income from property management fees and to cushion it from increasing financing costs.
Guangzhou Securities Co. Ltd. will be the manager and book runner for the issuance.
As of March 13, US$1 was equivalent to 6.32 yuan.
