China City Construction to repay yuan debt early

Bloomberg

China City Construction Holding Group Co., whose recent shareholder change triggered early redemption of its debt, will buy back its 2.5 billion yuan ($382 million) offshore yuan bond before maturity on June 20.
Its 2.5 billion yuan notes maturing 2017 jumped 1.5 yuan to 96.3 yuan, the biggest gain since May 9. That leaves it set for the highest close since April 18.
The construction company will buy back the notes at 101 yuan for every 100 yuan of principal on June 20, the company’s spokesman Yuan Qing said in a phone interview.
The funds will be partially from onshore and partially from offshore operations, Yuan said in another phone interview.
“We will definitely repay the 2.5 billion yuan Dim Sum bonds on June 20 because we have to guard our reputation so that we can issue new bonds in the future,” Yuan said.
China City Construction said in a statement last month a new shareholder Huinong Fund holds 99 percent of its shares and its previous largest shareholder China City Development Academy now only has a 1 percent stake.
The firm, which described itself as a large state-owned enterprise in its 2017 bond prospectus in 2014, is currently a private-sector firm with 1 percent stake held by a state-owned enterprise, spokesman Yuan said. Its bond prices slumped to as low as 79 yuan on May 6.
China Lianhe Credit Rating Co. said earlier this month the company had failed to disclose the shareholder change promptly.