(Bloomberg) — A unit of Chinese developer Yango Group Co. has won bondholder approval to issue new debt to swap for three maturing dollar bonds, effectively allowing it to delay upcoming repayments and avoid a default.
China Evergrande Group is giving incentives to property agents to sell more flats at one of its Hong Kong projects to help it pay commissions owed to them, the South China Morning Post reported, in the latest sign of the company’s cash woes.
Evergrande shares fell in Hong Kong Thursday, after the firm announced a plan to sell its stake in a listed internet unit at a hefty loss, dragging down those of its peers. Chinese junk dollar bonds, which are dominated by real estate firms, rose as much as 2 cents Thursday, according to traders, putting an end to two consecutive days of losses.
Key Developments:
- Yango Group Gets Bondholder Approval For Exchange Offer
- Evergrande Asks HK Agents to Sell More Flats for Fees Due: SCMP
- Evergrande Highly Likely to Default as Debt Pressure Builds: S&P
- China’s Housing Market to Contract But Not Crash, Barclays Says
- China’s Embattled Developers Rush to Raise $2 Billion in One Day
- Country Garden Services to Raise $1 Billion in Share Placement
- Evergrande to Sell Entire Stake in HengTen for $273 Million
Zhongliang Delivers Bond Payment (8:15 a.m. HK)
Zhongliang Holdings Group Co. said it has remitted funds to the trustee for repayment of the outstanding principal amount and accrued interest of a dollar bond due this month, according to a Hong Kong stock exchange filing.
Evergrande Asks HK Agents to Sell More Flats (7:56 a.m. HK)
China Evergrande Group is offering to pay outstanding commission fees owed on two flats for every additional one of similar value that agents sell at one of its Hong Kong projects, the South China Morning Post reported, citing notes from one of a series of meetings between the developer and property agencies.
Evergrande attributed the payment delay to its cash flow problems, saying that the project’s financing structure also “made it impossible to take a large amount of funds to pay commissions.”
Yango Gets Nod on Debt Exchange (7:36 a.m. HK)
A unit of Yango Group Co. announced that bondholders approved its offer to exchange three of its dollar bonds, according to a Thursday filing to the Hong Kong stock exchange.
The developer will issue $669.9 million of new notes due in September to replace the existing three bonds with a total outstanding value of $747 million. Yango Justice International Ltd. proposed the debt swap on Nov. 1 after seeing “enormous pressure” on short-term liquidity, saying then that if support fell short the company “may not be able to repay” existing notes.
Developer Shares Slide (4:15 p.m. HK)
Evergrande shares slipped more than 5%, as did shares of unit China Evergrande New Energy Vehicle Group Ltd. Country Garden Holdings Co., China’s biggest builder, fell 5.1%. A-Living Smart City Services Co. closed down 13%, the lowest level since October 2019.
China’s speculative-grade dollar bonds rose as much as 2 cents Thursday, according to traders. Panic has eased in the market in the past week, with yields dropping to about 20% from nearly 25%.
Postponed Bond Sale (3:56 p.m. HK)
State-run Bright Real Estate Group Co. on Thursday postponed a 580 million yuan ($90.8 million) bond sale to Friday. The statement came less than an hour after the developer said it had pulled the deal due to market volatility.
The Bubble Won’t Burst, Says Barclays (2:30 p.m. HK)
While Beijing is serious about reining in soaring property prices, its aim isn’t to kill the market, wrote Barclays analysts including Jian Chang in a note dated Thursday. Authorities have sufficient tools to manage a contraction and prevent a disorderly crash, according to the analysts.
About $2.4 Billion in 24 Hours (1:10 p.m. HK)
The scramble for cash by Chinese property companies is intensifying. Firms announced plans to raise $2.4 billion in just the past 24 hours, taking the total over the last week to at least $4.2 billion, according to Bloomberg calculations.
A look at Evergrande’s maturity schedule:
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