(Bloomberg) — Chinese property stocks gained after reports that banks in several Chinese cities have cut mortgage down payments for some homebuyers, a move that may boost flagging residential demand.
A Bloomberg Intelligence index of developer stocks rose 2.6%, paring the week’s drop to about 3.5%. Chinese authorities have been racing to arrest a worsening slowdown in the property sector that is hurting growth in the world’s second-largest economy. Almost exactly a year after China’s property-market debt squeeze sparked the first in a wave of defaults by developers, the industry is fighting for survival.
Developers have shown further signs of stress this week, as Yango Group Co., one of the 20 largest builders of last year, failed to make two dollar-bond interest payments.
Key Developments:
- China City Takes Leading Step to Boost Home Demand: Reports
- China Builders Miss More Deadlines as Yango Fails to Pay Coupons
- Orient Asset Mgmt to Sell 10b Yuan of Bonds to Aid Developers
- Exchange Offers to Keep Pressure on China Builders’ Bonds: GS
- Country Garden Real Estate Applies for 5b Yuan of Bond Issuance
Evergrande Property Services To Be Removed from Hang Seng China Enterprises Index (7:39 p.m. HK)
Evergrande Property Services Ltd will be removed from the Hang Seng China Enterprises Index on March 7, according to a statement.
Zhongliang Holdings Downgraded by Moody’s (6:14 p.m. HK)
Moody’s Investors Service downgraded Zhongliang Holdings Group Co.’s long-term corporate family rating to B2 from B1, with a negative outlook, citing “heightened refinancing risks because of its weakened funding access and sizable debt maturities over the next 12 months.”
Crisis in China’s Property Industry Deepens With No End in Sight (4:45 p.m. HK)
Home sales continue to plunge and elevated borrowing costs mean offshore refinancing is off the table for many developers. Global agencies are pulling their ratings on property bonds, while a string of auditor resignations is adding to doubts over financial transparency only weeks before earnings season. A sudden 81% plunge in the Hong Kong-listed shares of one real-estate firm is raising concern over the risk of margin calls.
As the cash crunch for developers worsens, so does the housing slowdown that’s become one of the biggest drags on China’s economy.
China Junk Dollar Bonds Extend Friday Rebound (3:42 p.m. HK)
Chinese high-yield dollar bonds gained at least 2 cents on the dollar Friday afternoon, according to credit traders, as the market seeks its first advance of the week.
A Bloomberg index of the sector had fallen four straight days, the longest stretch in a month.
China Cities Cut Mortgage Down Payments, Media Say (3:28 p.m. HK)
In Heze, a city of 8.8 million in Shandong province which was first reported to make the change, four big lenders lowered the down payment ratio for first-time homebuyers to 20% from 30%, separate media outlets said.
Some banks in the southwestern metropolis of Chongqing and the southeastern city of Ganzhou also lowered the ratio by the same amount, Shanghai Securities News reported Friday, citing property agents. Chinese authorities have been racing to arrest a worsening slowdown in the property sector that is hurting growth in the world’s second-economy.
Ronshine Onshore, Dollar Bonds Bounce From Recent Record Lows (3:18 p.m. HK)
Ronshine China Holdings Ltd. bonds rallied, with some onshore notes posting record gains, after debt-repayment concerns had send some of the Chinese developer’s debt to all-time lows this week.
The firm’s 10.5% dollar note due March 1, which plunged a week ago, climbed a further 10.7 cents on the dollar to 89.8 cents as of 3:10pm in Hong Kong, according to Bloomberg-compiled data.
Exchange Offers to Keep Pressure on China Builders’ Bonds: GS (10:02 a.m. HK)
Conditions for China’s high-yield dollar bond market will remain difficult through April if the increased pace of maturities the next two months corresponds with more firms proposing bond exchanges, says Goldman Sachs.
China Builders Miss More Deadlines as Yango Fails to Pay Coupons (9:22 a.m. HK)
The Shanghai-based developer that operates in more than 100 Chinese cities hasn’t made a combined $27.3 million of interest payments initially due Jan. 15 by a 30-day grace period, according to a Shenzhen stock exchange filing.
Yango said it is facing a temporary cash flow issue and plans to hold a bondholder meeting. Its parent failed to make a dollar-bond interest payment by the end of a grace period in December.
Sino Land’s Valuation ‘Depressed’ on Bearish H.K. Outlook, Citi Says (8:48 a.m. HK)
Sino Land Co.’s valuation remains “depressed” on weak home prices and a bearish outlook for Hong Kong’s residential segment, Citigroup Inc. analysts said.
The developer faces a dilemma over its HK$39 billion ($5 billion) net cash between falling returns from deposits and higher risk investment, analysts including Ken Yeung wrote in a report.
Greentown China Sells Additional $150 million 4.7% Notes Due 2025 (6:30 a.m. HK)
Additional notes yield 5.9% and will be consolidated and form a single series with the $300 million 4.7% bond due 2025 issued in October 2020.
Proceeds will be used to refinance existing debt. The deal comes after Greentown China Holdings Ltd. sold a $400 million 3-year green bond in January.
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