China Evergrande Group has come under the spotlight after it issued a USD6.6 billion bond, the largest U.S. dollar bond ever completed in Asia, even as it is committed to deleveraging. Evergrande, the country’s largest, yet most indebted developer with a debt-equity ratio over 400%, in March pledged to start deleveraging and has since repaid 70% of its outstanding high-interest perpetual bonds. Analysts said the fundraising could be a pre-emptive move to shore up its resources amid credit tightening. “As credit gets increasingly squeezed domestically, the company wants to accumulate enough cash on hand in advance,” said Danielle Wang, Property Analyst at DBS Vickers. Of the USD6.62 billion bond offering, USD2.82 billion is for debt exchange, and USD3.8 billion is three-tranche new money raised at a coupon rate of 6.25%, 7.5% and 8.75% respectively. In a statement, Evergrande said it intended to use the money to refinance existing debt and for general corporate purposes. Franco Leung, Senior Credit Officer at Moody’s said the developer’s gearing could still improve given the USD9 billion in debt is much less than its USD14 billion in perpetual bonds, which was on track to be cleared up by the end of the first half. The global rating agency revised its outlook for Evergrande to stable from negative. The larger than expected size of the bond has shaken up the region’s bond markets. Some investors who oversubscribed to the offer were surprised by its large size, receiving more than they had expected.