Many companies are starting to tap retail investors for equity and bonds

[edragon]

You have not seen many junk bonds, then...

Here are several companies paying over 10% on their bonds:

Fantasia 14%
Kaisa 13.5%
Renhe 11.75%
Country Garden 11.25%
Central China 12.25%

They are all real estate developers of some sort. You have to wonder what kind of IRRs they are assuming for their projects... and whether the Chinese government's edicts will eventually put a spanner in their operations.

Hi d.o.g.,

I am rather concerned about these junk bonds as I am vested in Renhe and Central China.

I have looked through the AR of Central China and found that there was a convertible bond issued on 31 August 2009 as follows:-

On 31 August 2009, the Company issued unsecured convertible bonds with principal
amount of HK$765,000,000 due 2014 (the “convertible bonds”) and 76,097,561 warrants
(the “warrants”). The convertible bonds are interest-bearing at 4.9% per annum and payable
semi-annually in arrears. The maturity date of the convertible bonds is 31 August 2014. The
convertible bonds can be converted to shares of the Company at HK$3.1 per share, subject to
anti-dilutive adjustment, from 28 February 2010 to 31 August 2014.

However, the interest is 4.9% and not 12.25%.

Please advise the details of the junk bonds if possible.

Thanks.