<article><p>Indebted Chinese developer<strong> <a href="https://www.dealstreetasia.com/?s=Guangzhou R&amp;F Properties Co." target="_blank" rel="noopener">Guangzhou R&amp;F Properties Co.</a></strong> could raise as much as $1.4 billion by selling shares in Hong Kong.</p></article>

<p>Indebted Chinese developer<strong> <a href="https://www.dealstreetasia.com/?s=Guangzhou R&amp;F Properties Co." target="_blank" rel="noopener">Guangzhou R&amp;F Properties Co.</a></strong> could raise as much as $1.4 billion by selling shares in Hong Kong.</p>
<p>The extra money would strengthen the company’s finances, improve its credit rating outlook and help to lower funding costs, it said on Monday. The timing isn’t set.</p>
<h3>Key Insights</h3>
<p>Investors will be assessing whether the fundraising plans have a whiff of desperation, given the company’s debt load and declines in equity markets that argue against selling shares now. It’s a big deal. Should R&amp;F raise the full amount sought, it will be the largest follow-on Hong Kong share sale by a Chinese developer ever, data compiled by Bloomberg show. Maybe a four-day, 10 percent rebound in its stock before the announcement made an equity fundraising seem more palatable.</p>
<h3>Market Reaction</h3>
<p>R&amp;F’s shares slid as much as 6.5 percent in Hong Kong on Monday, leading declines by developers and extending the firm’s fall this year.</p>
<h3>Digging Deeper</h3>
<p>The company plans to sell as many as 805.6 million H-shares in Hong Kong, which could raise as much as HK$10.7 billion, based on Friday’s closing price. R&amp;F is rated Ba3 at Moody’s, B+ at S&amp;P and BB- at Fitch, according to data compiled by Bloomberg. The company’s net debt to equity, a measure of leverage, climbed to 214 percent at the end of June, the second highest among 21 major developers tracked by Bloomberg Intelligence. Chinese developers face a double whammy of stricter funding constraints and slowing buyer demand. The sector is facing a record bond maturity wall in the first quarter of 2019.</p>
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<p><strong>Bloomberg</strong></p>


Indebted Chinese developer Guangzhou R&F Properties Co. could raise as much as $1.4 billion by selling shares in Hong Kong.

Chinese developer Guangzhou R&F Properties plans $1.4b HK share sale

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Chinese developer Guangzhou R&F Properties plans $1.4b HK share sale

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