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Coupon Deadlines Near; Kaisa Deferral Offer: Evergrande Update

Stock MarketsDec 07, 2021 04:42
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(Bloomberg) -- A group of Kaisa Group bondholders have sent the beleaguered property developer a formal forbearance proposal, which may buy some time and help it avoid a default on $400 million dollar bonds due Tuesday.

Shares in China’s real-estate companies jumped after policy makers moved to expand support for the economy as a property market downturn threatens to hamper growth into next year.

China Evergrande Group is planning to include all its offshore public bonds and private debt obligations in a restructuring that may rank among China’s biggest, people familiar with the matter said. The company plans to “actively engage” with offshore creditors on a restructuring, as grace periods on two dollar bond payments were due to end Monday. Its dollar bonds were largely unchanged Tuesday with the note due March 2022 at 23 cents on the dollar, while its bond due 2025 stood at 18.8 cents, Bloomberg-compiled prices show. The shares rose as much as 8.3%, the biggest jump in two weeks.

Key Developments:

  • Kaisa Creditors Offer Forbearance to Avoid Bond Default
  • China Developers Surge as Policy Makers Shift Toward Easing
  • China Shifts Toward Easing With Property Downturn Hitting Growth
  • Shimao Says It Will Raise Net HK$1.17b in Top-Up Placement
  • Evergrande Clarity? China Bank’s Offshore Issuance: BI APAC FICC
  • China Property Prices Expected to Remain Steady in 2022: News
  • Property, Policy Hold the Key to China 2022 Outlook: BI
  • Kaisa Fails to Deliver Flats, Pay Wages in Guangzhou: CCTV
  • Logan Group to Raise HK$1.17b in Share Placement

China Property Stocks Surge as Policy Makers Shift Toward Easing (11:40 a.m. HK)

Shares of China’s real-estate developers jumped after policy makers moved to expand support for the economy as a property-market downturn threatens to hamper growth into next year.

A Bloomberg gauge of Chinese developers rose 3.2% to its highest since Nov. 19 after President Xi Jinping oversaw a Politburo meeting on Monday that concluded with a signal of an easing in curbs on real estate. The People’s Bank of China also on Monday said it will reduce most banks’ reserve requirement ratio by 0.5 percentage point next week, releasing 1.2 trillion yuan ($188 billion) of liquidity.

China High-Yield Dollar 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 Tuesday morning on signs of possible easing, according to credit traders.

The notes are on track for the first gain in a week after a 0.2 cent drop Monday, a Bloomberg index shows

Logan Group, Shimao Raise Cash in Discounted Share Sales (8:32 a.m. HK)

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

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

Kaisa Fails to Deliver Flats, Pay Wages in Guangzhou: CCTV (8:26 a.m. HK)

Kaisa is unable to deliver some residential projects to buyers and fails to pay salaries to 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 (NYSE:BX) Funds (7:39 a.m. HK)

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

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

China Property Prices Expected to Remain Steady in 2022: News (6:57 a.m. HK)

China’s property prices are expected to remain “steady” in 2022, with the industry likely to see stable development, Shanghai Securities News reports, citing real estate research firm China Index Academy.

Second-hand home transaction volume in 50 Chinese cities saw about 2% growth in November from the previous month, the report said citing data compiled by KE Holdings Inc.

Watch China Developers as Policy Makers Shift Toward Easing (6:51 a.m. HK)

China’s property stocks may move after policy makers moved to expand support for the economy as a property-market downturn threatens to hamper growth into next year.

President Xi Jinping oversaw a meeting of the Communist Party’s Politburo on Monday that concluded with a signal of an easing in curbs on real estate. 

The People’s Bank of China also on Monday said it will reduce most banks’ reserve requirement ratio by 0.5 percentage point next week, releasing 1.2 trillion yuan ($188 billion) of liquidity.

Kaisa Creditors Offer Forbearance to Avoid $400 Million Default (12:32 a.m. HK)

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

The creditor group, which is being advised by Lazard (NYSE:LAZ) Ltd., sent the offer to Kaisa on Monday evening 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 Struggles (7:31 p.m. HK)

The property developer’s board established a risk management committee “in view of the operational and financial challenges” it is facing.

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

A look at Evergrande’s maturity schedule:

 

©2021 Bloomberg L.P.

Coupon Deadlines Near; Kaisa Deferral Offer: Evergrande Update
 

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