However, the bonds pay a comparatively high interest rate and can be converted at a modest premium to the company’s recent share price—showing that stronger players in the sector still need to pay up to secure backing from investors.

Country Garden’s shares have swung sharply in the past two weeks, and last week the company decided not to proceed with a potential $300 million convertible issuance. The property giant said it wouldn’t consider issuing convertible debt in unsuitable market conditions.

That hiccup unnerved the market, as investors worried that even comparatively strong developers might struggle to tap new funds, and Country Garden shares hit a near-five-year low on Monday. 

Since then, however, Country Garden shares have clawed back some losses, as part of an industrywide rebound. The recovery was fueled by central-bank easing and hopes regulators could give Chinese developers more access to cash payments made by customers for unfinished apartments.

The new convertible bonds are due 2026. They pay a 4.95% coupon and carry a conversion price of HK$8.10. That is the equivalent of $1.04 a share and represents a 16% premium to the developer’s Thursday closing price. 

In 2018, Country Garden issued convertible bonds denominated in Hong Kong dollars that paid a 4.5% coupon, and with a conversion premium of 30%.

There aren’t many Chinese developers that can currently issue offshore dollar bonds and some investors, especially international ones, have pushed Country Garden to reopen the market, said a person familiar with the matter. The rebound in Chinese developers’ stocks and bonds, and the gradual warming of investor sentiment, created a suitable window for issuing the convertible bonds, this person added. 

Proceeds will be used to refinance debts due within one year, Country Garden said. It has previously said it has prepared internal funds to repay a $411 million bond due this month, and will arrange payments for another $700 million bond due in July based on market conditions at that time.

The company’s bonds have also recouped some losses recently. Three dollar bonds due in 2026 were quoted at more than 80 cents on the dollar on Friday morning in Hong Kong, according to Tradeweb. On Monday they had fallen below 70 cents on the dollar.

Country Garden’s shares fell 2.9% Friday.

Country Garden has also been raising funds in the domestic yuan-denominated market. On Thursday, an asset-backed securities offering created from the company’s receivables raised 520 million yuan, the equivalent of $82 million. The developer also issued a 1 billion yuan corporate bond and did another supply chain asset-backed securities deal last month.

The latest debt sale and other recent issuances demonstrate Country Garden’s “stronger-than-peer funding capability in a very volatile funding environment,” S&P Global Ratings said Friday.

The ratings firm added, however, that it expects the developer’s sales to remain under pressure given Country Garden’s high exposure to lower-tier cities where housing demand is weaker amid the broader sector downturn. S&P has a high speculative-grade rating of BB-plus for the company.

Country Garden reported the equivalent of $88 billion in contracted sales for 2021, down 2.2% from the previous year, according to a regulatory filing.

Write to Rebecca Feng at rebecca.feng@wsj.com

Corrections & Amplifications
Country Garden shares fell 2.9% Friday. An earlier version of this article incorrectly said they fell by 3.6%. (Corrected on Jan. 21)