1. Interest rate - This is after all Chinese company. Even a US based company cant get under 8% on commercial paper unless it is a multi-billion dollar company with stellar credit. So 13% is not surprising
2. It is most likely hard to get the money out of china, especially such a large amount. Also Chinese Govt. may not be very happy if they did. They probably want to keep them happy so that for future deals in China they continue to get good terms. Also keeping huge liquidity in China would help them better compete with behemoths like Vanke in China
3. They may use it till maturity. As soon as they start making money in US, I think they are probably thinking of buying back. In other words, it may be short term arrangement.
4. May be they are up to something big and they want even bigger liquidity than they already have.
Again this is just my logical thinking.
One thing for sure. Nobody gets 200 million dollars these days in USA unless you are completely vetted by markets. Financial markets are super super conservative after the financial crisis.
Xinyuan intends to use the net proceeds of this offering to repay certain existing debts, invest in new real estate projects in China and the United States and the remainder for general corporate purposes.
"Even a US based company cant get under 8% on commercial paper unless it is a multi-billion dollar company with stellar credit. So 13% is not surprisin"..................except for the "FACT" that China Vanke got $800 Million at 2.65%, Whoops
very good thinking. except the part about making chinese govt happy. xin deals with multiple local govts in china, like the wild west. i don't think xin needs to go above and beyond since each deal is evaled locally according to local circumstances.
i agree there is advantage to getting the 200 mil through the big houses, like paying more for an ivy league education.