(Bloomberg) — A unit of Shimao Group Holdings Ltd. at the center of a missed loan payment said the incident won’t trigger investor demands for accelerated repayment of its debt in public markets.
The business said in a stock exchange filing that it faces liquidity pressure and will take steps to quicken asset sales. It said it hasn’t suffered any public-market debt default.
Shimao’s shares pared steep declines, finishing the day down 5.4% at the lowest since March 2009 after falling as much as 18%. The developer’s 3.76% yuan bond due July closed 18% lower, after a 25% intraday plunge that triggered a brief trading halt.
In a sign of limited contagion risk from Shimao’s debt woes, Chinese property stocks rallied after two days of losses, buoyed by a local media report that authorities have eased financing restrictions for major real estate firms. A Bloomberg Intelligence China property gauge erased an earlier loss of 1.3% to gain as much as 3.6%.
Key Developments:
- China Property Stocks Rebound on Report on M&A Loans Metrics
- China Urges Banks to Boost Property Loans as Default Fears Grow
- Shimao Seeks Extension on Three ABS Worth 1.4b Yuan: REDD
- Shimao Unit Says Trust Matter Won’t Spur Early Bond Repayment
- China Developers’ M&A Loans to Be Excluded From Metrics: Cailian
- Shimao Default Notice Hammers Bonds, Stokes China Property Fear
Shanghai Shimao Says Repayment on Yuan Bond Set For Jan. 17 (4:51 p.m. HK)
Shanghai Shimao Co. says in an exchange filing that its scheduled to make a principal payment of 1.9 billion yuan on January 17. The bond’s issuance was 2 billion yuan, but buybacks last year trimmed the outstanding principal to 1.9 billion yuan.
Zhenro Pays Dollar Bond Coupon (3:28 p.m. HK)
Zhenro Properties Group Ltd. has made a dollar-bond interest payment due Friday, according to a company spokesperson. The firm had a $13 million coupon due on a 2026 note, according to data compiled by Bloomberg.
It has $1.39 billion of other bond maturities and coupon payments due this year.
China Urges Banks to Boost Property Loans (2:18 p.m. HK)
China called on banks to boost real estate lending in the first quarter and eased a key debt restriction for developers, a sign that authorities are becoming increasingly concerned about the industry’s liquidity crisis.
Property Stocks Rebound on Reported Metrics Easing (1:08 p.m. HK)
Chinese property stocks rebounded from two days of losses, after authorities have reportedly eased financing curbs for major developers. The rally was led by state-owned, large-size real estate firms.
Shimao Said to Seek ABS Maturity Extension (11:28 a.m. HK)
Shimao Group is seeking maturity extension on three asset-backed securities totaling 1.4 billion yuan ($220 million) due this month, according to a report by REDD.
The developer is proposing to repay 10% of the principal in the first month, 5% of the principal monthly from February to November and the remaining 40% principal in December.
Shimao Unit Plays Down Impact of Loan Miss (9:46 a.m. HK)
A unit of Shimao Group said it hasn’t suffered any default in public markets, while its missed loan payment won’t trigger demands for accelerated repayment, according to an exchange filing.
The company said it is faced with liquidity pressure and will take measures to speed up asset sales.
DaFa Properties Begins Swap Bond Offer (8:59 a.m. HK)
DaFa Properties Group Ltd. has begun an exchange offer for at least $166 million, or 90%, of the outstanding principal amount of its 9.95% 2022 notes, the company said in an exchange filing. The developer said it is also soliciting consents to proposed waivers and amendments from bondholders.
New notes to be issued for the bond swap will mature on June 30 and will bear a coupon of 12.5%. The offer will expire at 4 p.m. London time on Jan. 12.
Aoyuan in Talks to Sell Offshore Projects (8:45 a.m. HK)
China Aoyuan Group Ltd. is in talks to sell four to five offshore projects with an estimated value of about 3 billion yuan, local media The Paper reported, citing an unidentified person close to the deal.
Developers’ M&A Loans to Be Excluded From Metrics (7:52 a.m. HK)
Major developers’ loans for mergers and acquisitions won’t be included in China’s “three red lines” metrics on debt, local media Cailian reported, citing unidentified people familiar with the situation.
Developers were informed by lenders that the adjustment is applicable for property M&A loans that they take on the debt of the target companies, the report said.
Shimao Default Notice Hammers Bonds (7:30 a.m. HK)
Shimao Group Holdings Ltd., a bellwether for financial contagion in China’s embattled property industry, suffered its biggest-ever bond rout on Thursday after a creditor said one of the developer’s units defaulted on a local loan.
The Shimao unit failed to pay 645 million yuan of a total 792 million yuan due by Dec. 25, according to a notice sent to investors by China Credit Trust Co. The trust firm had demanded early repayment by Dec. 25 after the developer failed to meet installment requirements, according to the notice.
Shimao Pledges Unit’s Shares for Loans (7:25 a.m. HK)
Shanghai Shimao Investment Management pledged 265 million shares, or a 7.06% stake in Shanghai Shimao Co. with Ningbo Commerce Bank Co. Wednesday to fund its operations, according to an exchange filing.
Shimao Investment and two other companies controlled by founder Hui Wing Mau have pledged a combined 560 million shares of Shanghai Shimao, representing a 14.93% stake in the company, as of Thursday.
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