(Bloomberg) — Sunac China Holdings Ltd.’s shares tumbled in a record intraday decline after the embattled Chinese developer’s $580 million top-up share sale did little to restore confidence in the firm’s longer-term financial health.
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. Chinese developer Shimao and its onshore unit is seeking to delay full repayment on two asset-backed securities.
Sunac shares declined as much as 20% in Hong Kong, while a gauge of Chinese property developers fell 2.5%. Sunac’s dollar bond due 2024 fell 2.1 cents on the dollar to 46.9 cents on Thursday morning, set for a record low, Bloomberg-compiled prices show. 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 Bonds, Shares Tumble After $580 Million Stock Offering
- China Developers’ Short-Sighted Moves Are Backfiring: Shuli Ren
- Yuzhou Seeks to Exchange, Amend Notes to Avoid Default (1)
- 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
Shimao Proposes to Delay Full Repayment on ABS (10:51 a.m. HK)
Chinese developer Shimao and onshore unit Shanghai Shimao Jianshe will meet with investors Monday to seek approval to extend two ABS repayment deadlines, according to private filings with the Shanghai Stock Exchange seen by Bloomberg News.
Sunac Bonds, Shares Tumble After $580 Million Stock Offering (10:55 a.m. HK)
Sunac China Holdings Ltd.’s bonds and shares fell after the embattled real estate giant raised $580 million in a top-up stock sale to fend off a liquidity crisis.
The nation’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, according to terms of the deal obtained by Bloomberg News.
The share placement has done little to restore investor confidence in the firm’s longer-term financial health, even though funds will be used in part to repay some loans.
Top China Fund Manager Is Buying Developers’ Dollar Bonds Again (10 a.m. HK)
A top-performing Chinese fund manager is buying dollar bonds of the country’s developers after offloading them last year, betting that authorities will soon unleash further measures to support the sector.
Developer bonds yielding 10% to 20% offer value because investors turned overly pessimistic, according to Deng Sicong, a Beijing-based fund manager at China Asset Management Co. Deng’s fund is the top performer of the past year among the 25 Qualified Domestic Institutional Investor products that give China’s domestic investors access to offshore securities, according to data compiled by Bloomberg.
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.
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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