Coupon deadlines close; Kaisa Deferral Offer: Evergrande Update by Bloomberg


Coupon deadlines close; Kaisa Postponement Offer: Evergrande Update

(Bloomberg) – A group of Kaisa Group bondholders sent the beleaguered property developer a formal forbearance proposal, which could save him time and help him avoid a default on $ 400 million bonds of dollars due Tuesday.

Shares of Chinese real estate companies surged after policymakers decided to expand support for the economy as a slowdown in the real estate market threatens to hamper growth next year.

China Evergrande Group plans to include all of its offshore government bonds and private debt obligations in a restructuring that could be among the largest in China, people familiar with the matter said. The company plans to “actively engage” with foreign creditors in a restructuring, as grace periods on two-dollar bond payments were due to end on Monday. Its dollar bonds were largely unchanged on Tuesday with the note due March 2022 at 23 cents to the dollar, while its bond due 2025 stood at 18.8 cents, according to prices compiled by Bloomberg. Shares rose 8.3%, the biggest jump in two weeks.

Key developments:

  • Kaisa’s creditors offer tolerance to avoid default on obligations
  • Chinese developers flock as policymakers move towards easing
  • China moves towards easing as slowdown in real estate hits growth
  • Shimao says he will increase net amount of HK $ 1.17 billion in top-up
  • Evergrande Clarity? China Bank offshore issue: BI APAC FICC
  • Real estate prices in China are expected to remain stable in 2022: News
  • Property and politics hold key to China’s 2022 outlook: BI
  • Kaisa fails to deliver apartments and pay wages in Guangzhou (CCTV)
  • Logan Group Raises HK $ 1.17 Billion in Share Offering

Real estate stocks in China rise as policymakers move towards easing (11:40 a.m. HK)

Chinese property developers’ shares surged after policymakers decided to expand support for the economy as a housing market slowdown threatens to hamper growth next year.

A Bloomberg gauge of Chinese developers rose 3.2% to its highest level since Nov. 19 after President Xi Jinping oversaw a Politburo meeting on Monday that ended with a signal to ease restrictions on real estate. The People’s Bank of China also announced on Monday that it will reduce the reserve requirement ratio of most banks by 0.5 percentage points next week, freeing up 1.2 trillion yuan ($ 188 billion) in cash.

Chinese dollar high yield bonds on track for first gain in a week (10:28 a.m. HK)

Chinese high yield dollar bonds rose as much as 2 cents on the dollar on Tuesday morning on signs of possible easing, according to credit traders.

Banknotes On Track For First Gain In A Week After Falling 0.2 Cent On Monday, Bloomberg Index Says

Logan Group, Shimao Raise Money on Discounted Stock Sales (8:32 a.m. HK)

Logan Group sold 172 million new shares at HK $ 6.80 each, a discount of 9.9% from their last close on Monday, raising HK $ 1.17 billion ($ 150 million). The proceeds are used for investments in projects and for general working capital purposes.

The Shimao Group also raised HK $ 1.17 billion through the sale of 145 million shares at HK $ 8.14 each to raise funds for debt repayment and general purposes. The offer price is about 8.5% lower than the last close of HK $ 8.90.

Kaisa fails to deliver apartments and pay wages in Guangzhou: CCTV (8:26 a.m. HK)

Kaisa is unable to deliver some residential projects to buyers and does not pay wages for some workers in Guangzhou, state broadcaster CCTV reported.

About eight projects have been halted, CCTV reports, citing the workers.

Guangzhou R&F to Sell Stake in Properties to Blackstone Funds (NYSE 🙂 (7:39 a.m. HK)

Guangzhou R&F Properties has agreed to sell its interest in properties located in the R&F Integrated Logistics Park at Guangzhou International Airport to an investment company affiliated with Blackstone.

Blackstone-affiliated funds held a 70% stake in the properties, while Guangzhou R&F held 30% prior to the transaction.

China property prices to remain stable in 2022: News (6:57 HK)

Real estate prices in China are expected to remain “stable” in 2022 as the sector is likely to experience stable development, reports Shanghai Securities News, citing real estate research firm China Index Academy.

The second-hand home deal volume in 50 Chinese cities grew about 2% in November from the previous month, according to the report citing data compiled by KE Holdings Inc.

Watch Chinese Developers as Policymakers Move Towards Easing (6:51 a.m. HK)

China’s real estate stocks could move after policymakers decide to expand support for the economy, as a downturn in the real estate market threatens to hamper growth next year.

President Xi Jinping on Monday oversaw a Communist Party Politburo meeting that ended with a signal to ease restrictions on real estate.

The People’s Bank of China also announced on Monday that it will reduce the reserve requirement ratio of most banks by 0.5 percentage points next week, freeing up 1.2 trillion yuan ($ 188 billion) in cash.

Kaisa’s Creditors Offer Tolerance to Avoid $ 400 Million Default (12:32 p.m. HK)

A group of Kaisa Group bondholders sent the company a formal forbearance proposal, designed to give the beleaguered property developer time and avoid default.

The group of creditors, advised by Lazard (NYSE 🙂 Ltd., sent the offer to Kaisa on Monday night in Hong Kong, according to two people familiar with the matter. Kaisa declined to comment on the proposal.

Evergrande Board Sets Up Risk Committee Amid Financial Hardship (7:31 PM HK)

The promoter’s board of directors has set up a risk management committee “in view of the operational and financial issues” with which it is confronted.

The seven-member panel, chaired by Chairman Hui Ka Yan, also includes Evergrande’s CFO, Pan Darong, and five people from outside Evergrande: Liu Zhihong, Zhao Limin, Li Feng, Chen Yong, and Hao Han.

An overview of Evergrande’s maturity schedule:

© 2021 Bloomberg LP

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