(Bloomberg) — Sunac China Holdings Ltd.’s shares sank after the embattled Chinese developer raised $580 million in a top-up share sale to ease a liquidity crisis.
China Evergrande Group, which already failed to repay dollar debt on time, is seeking to avoid its first onshore default when holders vote on whether to allow the firm to defer payment Thursday. Yuzhou Group said it is seeking an exchange of two of its 2022 senior notes as it attempts to avoid default.
Sunac shares declined as much as 20% in Hong Kong, a record intraday drop, while a gauge of Chinese property developers fell 1.1%. Some of China’s most stressed builders face a raft of key payments this week in a test for the country’s volatile credit market.
Key Developments:
- Sunac’s $580 Million Share Sale Halts Downward Spiral in Bonds
- Yuzhou Group Seeking to Exchange, Amend Notes to Avoid Default
- DaFa Properties Extends Debt Offer Deadline by 1 Day to Jan. 13
- China Property Firms Face Raft of Key Payments This Week (1)
- Shimao Plans to Repay Yuan Bond Due Saturday After Cash Inflow
- World’s Worst-Performing Bank Lent Billions to China Evergrande
Game Theory Suggests China HY Investors May Welcome Haircut (9:10 a.m. HK)
Other distressed developers may follow the same tactic as Guangzhou R&F Properties Co. to extend or freely haircut a portion of their debt, whether in good or bad faith, Bloomberg Intelligence analyst Andrew Chan wrote in a note. This action should diminish investor expectations of distressed bonds being redeemed at par, but at the same time high-yield bondholders may welcome a haircut rather than endure restructuring.
Sunac’s Share Sale Halts Downward Spiral in Bonds (7:30 a.m. HK)
Sunac China Holdings raised $580 million in a top-up share sale, easing fears of a liquidity crisis that had sent the Chinese real estate giant’s dollar bonds tumbling to record lows on Wednesday.
China’s third-largest property developer by sales sold 452 million shares at HK$10 apiece, a 15% discount to Wednesday’s close in Hong Kong, terms of the deal obtained by Bloomberg News show. The placement comes just two months after Sunac raised about $953 million from the sale of new shares as well as a stake in its property management unit.
Yuzhou Group Seeking to Exchange Notes to Avoid Default (7:05 a.m. HK)
Yuzhou Group said it is seeking an exchange of two of its 2022 senior notes as it attempts to avoid default.
The company said in a filing it’s inviting holders of its 6% and 8.625% 2022 senior notes, totaling $542 million, to exchange them for new bonds with an extended maturity. Yuzhou said it doesn’t expect to have sufficient funds to repay note holders who don’t agree to the exchange, “which would likely trigger an event of default.”
DaFa Properties Extends Debt Offer Deadline (6:40 a.m. HK)
DaFa Properties Group extended the expiration deadline for an exchange offer and consent solicitation of 9.95% 2022 notes by 24 hours to 4 p.m. London time Jan. 13, according to a statement to the Hong Kong stock exchange.
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