CHINA Evergrande Group said yesterday its units have sold three tranches of senior notes worth US$1.8 billion, paying coupon rates of up to 13.75 percent, with chairman Xu Jiayin buying US$1 billion in the notes.

The debt-laden property developer said in a filing the amount of the two-year, four-year and five-year dollar bonds was US$565 million, US$645 million and US$590 million, respectively.

Among the three tranches sold Tuesday, Xu and his wholly-owned company — Xin Xin (BVI) Ltd. — each bought US$250 million in the four-year notes, which offer 13 percent interest.

The two-year notes carry interest of 11 percent. The proceeds will be used to refinance existing offshore debt, the company said.

Evergrande, China’s second-largest property developer by sales, has been under pressure to raise funds. Sources said last month the firm was seeking to raise about US$1.5 billion by offering its Hong Kong office tower as collateral.

Evergrande, which has one of the highest debt ratios in the industry, had offshore debt of US$16.4 billion as of the end of June.

Chinese property developers are struggling with higher debt costs as rising U.S. interest rates push up financing costs for high-yield borrowers.

Compounding the problem, China’s red-hot property sector is slowing, with homes sales falling in September for the first time since April.

The bonds were assigned a B rating by the ratings agency S&P, and a B2 rating by Moody’s.

Evergrande’s “uneven liquidity profile and high leverage remain the key constraints on the rating. Its strong market position, sales execution, and recovering margins offset these weaknesses,” S&P said.

(SD-Agencies)