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Bondholders get paid; junk notes rebound: Evergrande update

Some China Evergrande Group bondholders received an overdue interest payment shortly before the expiry of a grace period, buying more time for the debt-stricken property developer to raise cash from asset sales.

Certain holders of the 9.5% dollar note maturing in 2024 received notification they had been paid on Thursday, according to people with knowledge of the situation, who asked not to be identified discussing private payments. Evergrande skipped an interest payment due September 29, starting the clock on a 30-day grace period before investors could declare a default. It’s the second time this month that the debt-stricken property developer avoided default.

Evergrande’s 8.75% dollar bond due 2025 was indicated 0.4 cent on the dollar higher at 23 cents on Friday, Bloomberg-compiled data shows.

Chinese dollar junk bonds rebounded on Friday following the latest payment to international bondholders. That came after a selloff on Thursday paced by Kaisa Group Holdings Ltd., one of the property sector’s largest issuers of dollar debt.

Key Developments:

  • Evergrande Pays Overdue Interest and Again Dodges Default
  • Evergrande Hui’s House Pledge to Help Pay $260m Bond: HK01
  • Hong Kong Tycoon Loses $174 Million in Property Bond Fire Sale
  • Kaisa Is Latest Property Developer Worry in China
  • Chinese Estates Sold All Kaisa Group USD Bonds
  • China Property Sector Caught In Negative Credit Loop: Moody’s
  • How China and Evergrande Are Trying to Avoid Disaster
  • Fantasia Group China to Hold Bondholder Meeting Nov. 10

China Developer Yango Slumps as Some Directors Balk at Results (2:12 p.m. HK)

Yango Group shares plunged after the Shanghai-based property developer reported its first quarterly adjusted loss since 2007 and two directors questioned the firm’s latest results.

The plunge comes a day after peer Kaisa Group saw its biggest-ever stock drop. Investor worries over the industry have been amplified this month in the wake of multiple defaults and record levels of credit rating downgrades as one-time heavyweight China Evergrande Group limps toward a potential debt restructuring.

Chinese Developer Oceanwide’s San Francisco Project Seized (12:37 p.m. HK)

While investors around the world are watching to see how the crisis around China Evergrande is resolved, holders of distressed developer China Oceanwide Holdings Co.’s unit seized its shares in a billion-dollar property project in San Francisco.

Overseas credit holders of Oceanwide’s two offshore units have taken over their entire holdings in the project. The two dollar notes, worth a combined HK$2.6 billion ($334 million), have matured.

China Dollar Junk Bonds Climb After Six-Day Selloff (10:13 a.m. HK)

China dollar junk bonds rose as much as 1.5 cents on the dollar Friday morning, according to credit traders, set to end six consecutive days of declines fueled by Evergrande contagion fears. Those gains would be the biggest jump on a closing basis in nearly two weeks, according to a Bloomberg index.

Chinese Banks Ease Credit Controls in Slowing Property Market (8:56 a.m. HK)

Chinese banks have started to ease credit controls on homebuyers and developers in response to government instructions amid investor worries about an economic slowdown.

Banks in some areas have accelerated issuing home loans and lowered mortgage rates, while the credit environment for property developers is also improving, the official Securities Times said in a report Friday.

China Developers May Move as Evergrande Again Sidesteps Default (8:51 a.m. HK)

Chinese property stocks will be in investors’ focus Friday after Evergrande’s interest payment. Stocks to watch beyond the firm and its management and electric-vehicle units are mainland developers listed in Hong Kong. They include Country Garden Real Estate Group Co., Sunac China Holdings Ltd. and China Resources Land Ltd.

Evergrande Hui’s House Pledge to Help Pay $260m Bond: HK01 (7:33 a.m. HK)

A loan from China Construction Bank (Asia) Corp. secured with Evergrande Chairman Hui Ka Yan’s house on Hong Kong’s Peak will be used to help pay a $260m bond issued by Jumbo Fortune Enterprises and guaranteed by the developer, HK01 reports, citing documents from the city’s Company Registry.

Dollar bonds Coupon due date Grace period ends Amount

(million dollars)

EVERRE 9.5% due 2022 Oct. 11 Nov. 10 68.88
EVERRE 10% due 2023 Oct. 11 Nov. 10 42.5
EVERRE 10.5% due 2024 Oct. 11 Nov. 10 36.75
TIANHL 13% due 2022 Nov. 6 Dec. 6 41.93
TIANHL 13.75% due 2023 Nov. 6 Dec. 6 40.56
EVERRE 7.5% due 2023 Dec. 28 Jan. 27 50.43
EVERRE 8.75% due 2025 Dec. 28 Jan. 27 204.77

© 2021 Bloomberg

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