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China's Blowtorch to Property Bubble Melts Bondholders' Wealth
https://www.msn.com/en-us/money/mark...lth/ar-AAQtjRw
Making bondholders take it in the shorts isn't new though.
Interesting.
It is the biggest, but every few days some other company starts flashing red warning lights about missed bond payments.
China's Blowtorch to Property Bubble Melts Bondholders' Wealth
https://www.msn.com/en-us/money/mark...lth/ar-AAQtjRw
Making bondholders take it in the shorts isn't new though.
"Evergrande, a huge and embattled Chinese property developer, suspended the sale of its shares on the Hong Kong stock exchange, saying only that it was pending the release of “inside information”. The firm’s struggle to service its $300bn debt has raised fears of a financial crisis in China and beyond. Last week it missed a $255m coupon payment. It has yet to release a recovery plan." _-Economist magazine blurb
Or not.
Trading in China Evergrande shares, onshore bonds halted pending announcement
HONG KONG, March 21 (Reuters) - Shares of embattled property developer China Evergrande Group (3333.HK) and onshore bonds issued by its flagship unit Hengda Real Estate Group were suspended from trading on Monday, pending an announcement by the company.
Trading was also halted in shares of its property services unit, Evergrande Property Services Group Ltd (6666.HK), and electric vehicle unit, China Evergrande New Energy Vehicle Group Ltd (0708.HK), exchange filings showed.
The filings gave no further details.
Evergrande, the world's most indebted developer with over $300 billion in liabilities, has been struggling to repay its suppliers and creditors and complete projects and homes.
Hengda secured approval from its onshore bondholders over the weekend to delay a coupon payment due last September to September 2022, according to a filing by the company's lawyer to the Shenzhen Stock Exchange on Sunday.
Hengda held a meeting with creditors of the 4 billion yuan ($629 million) 2025 bond on March 18-19 to approve the payment of interests incurred between September 2020 to September 2021 to be made in September 2023. read more
Evergrande has so far avoided technical bond defaults onshore, though it has missed payments on some offshore bonds.
https://www.reuters.com/business/tra...ex-2022-03-21/
https://finance.yahoo.com/news/china...034952688.html
-----------------------------------“Companies haven’t been transparent about their private debt and upcoming payments, but the market’s also been rife with rumors supposedly linked to short-selling,” said Anthony Leung, head of fixed income at Metropoly Capital HK Ltd. “The lack of transparency has led to a vicious cycle of panic selling and a collapse in the price of securities, which closes refinancing channels.”
Concerns have also cropped up that creditors holding opaque debt might receive preferential treatment, with developers opting to repay those obligations while skipping or extending deadlines for its publicly held offshore bonds. Only weeks after assuring investors it had sufficient working capital and wasn’t facing any cash squeeze, Fantasia Holdings Group Co. defaulted on a public note. It told Fitch that it repaid a private bond just days earlier.
Onshore bondholders can sometimes continue to receive payments, even as borrowers overlook offshore debt. China Evergrande Group paid interest on a local bond even after it had missed coupon payments on several dollar notes.
“Hidden debt worries aren’t new in China,” said Leung. “But when companies come close to the brink of collapse, it becomes even harder to tell what news is real or fake.”
https://money.usnews.com/investing/n...tates-stresses
SHANGHAI (Reuters) - Chinese high-yield property issuers have by one measure defaulted on nearly a quarter of their outstanding bonds this year, Goldman Sachs analysts estimated, highlighting liquidity stress as Beijing looks to stabilise the battered sector.
Estimating the year-to-date default rate at 5.5%, Kenneth Ho and Chakki Ting said in a note Friday that this headline figure understated stress in a sector where developers have entered into bond exchanges to avoid triggering defaults.
"If we assume all the bonds from issuers that have entered into bond exchange or maturity extension transactions as being in default, the (year-to-date) default rate would rise to 23.4%," they said.
Ho and Ting said they maintained a default forecast for the sector of 19% for 2022, with a bull case of 10.5% and a downside case of 31.6%.
"Whilst credit stresses have picked up, China policymakers have also reiterated their accommodative policy stance," they said, adding that "risks are clearly tilted towards the downside case."
Of bonds in the sector that have passed their final maturity dates so far this year, 31% have entered into bond exchange or maturity extension transactions, 26% have defaulted and 42% were fully repaid.
More bond exchanges and defaults are likely, with $2.3 billion maturing in April, and more than $3 billion each in June, July and August, they said.
https://www.youtube.com/watch?v=UptsCnj0vpA
The write down of Evergrandes assets will be the first domino.
im so tired of hearing about how evergrand is gonna over the chinese market, they've said that for years, ing do it already
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