(Bloomberg) — One of China’s largest issuers of junk dollar debt will announce Thursday whether creditors agreed to a debt swap designed to avert default.
Kaisa Group Holdings Ltd., which became the first Chinese developer to default on such bonds in 2015, is trying to stave off another collapse that could come as soon as next week. The company’s offer to exchange its $400 million of dollar notes maturing Dec. 7 for new ones due 18 months later expires at 4 p.m. London time.
Kaisa shares were little changed, while its bonds were indicated about 1 cent on the dollar higher, according to Bloomberg-compiled prices. Meanwhile, China Evergrande Group’s listed units sank amid heavy volume in Hong Kong trading. Shares of its electric-vehicle business lost almost a fifth of their value within minutes.
Key Developments:
- Kaisa Abandons Hong Kong Developments in Race to Avoid Default
- Worst May Be Over for China Junk Bonds, But Not Out of Woods Yet
- China’s Li Urges Crackdown on Late Payments to Small Businesses
- China Private Builders’ Yuan Bond Sales Hit Lowest in Five Years
- China Home Sales Slump Deepens as Easing Shows Little Effect
- Arkkan Raises $245 Million for China Real Estate Recovery Fund
- China’s Developers Face $12 Billion in Trust Payments This Month
Evergrande NEV Sinks (11:11 a.m. HK)
China Evergrande New Energy Vehicle Group Ltd. fell as much as 22% in Hong Kong, the most in more than two months. Multiple trades comprising 100,000 to 200,000 shares were recorded shortly before 11 a.m. local time. Another unit of the builder, Evergrande Property Services Group Ltd. dropped as much as 6.8% to a fresh record low. HengTen Networks Group Ltd., which Evergrande agreed to dispose its remaining 18% stake of last month, declined 9.3%.
Late Payments Crackdown (9:56 a.m. HK)
China’s government vowed to address the problem of an increase in overdue payments to small businesses in a State Council meeting chaired by Premier Li Keqiang Wednesday.
Small and medium-sized companies’ account receivables have increased rapidly and there have been more incidents of delayed payment this year due to sporadic virus outbreaks and the complex environment both domestically and internationally, the meeting of China’s cabinet said.
Seazen Sinks After Rights Issue (9:37 a.m. HK)
Seazen Group Ltd.’s shares dropped as much as 7.3% in their trading resumption after the developer announced plans to issue as many as 296.2 million rights shares. The offer price represented a 5.6% discount to the theoretical ex-rights price, based on Wednesday’s closing price.
The proceeds are slated be used as additional capital reserve to capture business opportunities in China and for general corporate purposes, the company said in an exchange filing.
Kaisa to Meet Bondholders (8:59 a.m. HK)
Kaisa will meet its offshore bondholders and discuss ways of repaying its loans, the South China Morning Post reported, citing unidentified people. Options presented by some bondholders include an offer to buy new bonds by Kaisa that could be exchanged with equity in some of the developer’s listed units.
The debt exchange offer expiring Thursday requires a 95% approval rate. Kaisa has said it may not be able to repay bonds and could consider a debt restructuring if it fails to win support. The firm has some $11.6 billion in dollar debt outstanding. That means a potential default risks spurring selling in the broader high yield market.
PBOC to Keep Steady Funding Conditions (7:58 a.m. HK)
China’s central bank will keep funding conditions steady as the year-end approaches, according to a report in the China Securities Journal which cited market experts. The People’s Bank of China is likely to roll over the medium-term lending facility in December, the report said.
A 950 billion yuan ($149 billion) maturity in December is a consequence of action taken last year to calm financial markets following a series of defaults by state-owned companies. Click here for a table showing the net position of cash liquidity of People’s Bank of China.
CST Sells Evergrande Bonds (10:48 p.m. HK)
CST Group Ltd. said one of its units has disposed of China Evergrande Group notes in the secondary market. The Hong Kong-based investment group said it will to record a loss of about $21.6 million for the financial year ending March 2022 as a result of the disposals.
A look at Evergrande’s maturity schedule:
More stories like this are available on bloomberg.com
©2021 Bloomberg L.P.
