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Xinyuan Real Estate Co., Ltd. Message Board

  • teknowiz teknowiz May 5, 2013 6:50 AM Flag

    My theory on 200 mil note offering

    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.

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