Country Garden, one of China’s biggest property developers, has postponed a planned $1bn-plus global bond issue.

The company, which was getting money from international debt markets for the first time, was offering 10-year US dollar-denominated bonds at a yield of 10% and 5-year bonds at 9.25%. Asian and European investors responded positively, and $1.1 billion in commitments was secured by the end of the first day negotiations were possible.

But the sub-prime problem — read shonky mortgages given by daft lenders — keeps getting bigger. In the United States, at the end of the first day only an additional $100,000 in orders had been secured, prompting Country Garden to cancel its offering.

One comment was, ‘It was probably the worst environment in five years.’

Country Garden was planning on using funds raised to fund new projects and repay short-term loans, but it is probable that will now not happen until next year.

Our picture is of Yang Guoqiang, Country Garden’s founder and chairman, in happier times.
Source: Financial Times