Dalian Wanda Commercial Raises USD 400M in Dollar Bonds

According to sources, Dalian Wanda Commercial Management raised $400 million in a US dollar bond, the first publicly sold dollar bond by a Chinese property-related firm since late 2021, when the sector's debt crisis reached a head.

The company is the property services division of Dalian Wanda Group, a commercial real estate developer.

Investor confidence in China's property sector has been harmed by a string of debt defaults and bond exchanges to extend repayments since late 2021, when China Evergrande Group's liquidity problems worsened, leaving companies with little room to raise new funds offshore.

The final pricing for Wanda's 11% two-year bond was set with a yield of 12.375%, compared to the initial price guidance given to investors of 12.625%, according to the term sheet.

According to a presentation seen, the book received 3.7 times over-subscription, with US$500 million orders from long-only funds such as Blackrock, Fidelity, Pictet AM, Invesco, and PAG.

"This deal reopened the dormant China property and high-yield bond market, and received an active and positive reaction," it added.

Unlike many other Chinese developers who focus on residential projects, Dalian Wanda Group is asset-light and relies on rental income. According to the term sheet, Wanda will use the proceeds to refinance existing debt and for general corporate purposes.

Moody's assigned the notes a Ba3 rating, while Fitch Ratings assigned a BB rating. Both are high-yielding varieties.

Wanda's issuance, according to S&P Global, was a good signal to the market, and it was beneficial for corporates to have multiple financing channels, even if offshore rates were higher than onshore rates now.