(Bloomberg) — Shares of Country Garden Holdings Co. fell a third day after the nation’s largest developer failed to get enough interest for a $300 million convertible bond. The stock is on track for its worst week since October, while a dollar bond due in 2024 is also set for a record low.
China Evergrande Group shares gained after it avoided what would have been its first default on a public onshore bond. The stock gained as much as 2.5% following three days of declines. An Evergrande unit said it got investor backing to delay early repayment of a 4.5 billion yuan ($707 million) note.
Sunac China Holdings Ltd. said late Thursday its $580 million share sale was a precautionary move and that it had no plans to raise more funds in the equity market in the near future. China’s third-largest builder sold shares at a 15% discount to help repay some loans.
Key Developments:
- China’s Property Market Is Set for State-Dominated ‘Age of Rust’
- Country Garden May Follow Sunac, Shimao’s Path After Failed CB
- DaFa Properties Says $144.1m of 2022 Notes Validly Tendered
- Sunac: Total Cash at RMB160b, Can ‘Fully Meet Debt Obligations’
- Evergrande Unit Gets Investors to Back Yuan Bond Payment Delay
Country Garden Shares Decline to Lowest Since 2017 (10:52 a.m. HK)
Country Garden shares dropped as much as 3.9% in Hong Kong to the lowest since March 2017. Its dollar bond due 2024 fell 1.3 cents on the dollar to 86.8 cents, set for a record low, Bloomberg-compiled prices show.
“Country Garden may place shares after failing to issue $300 million of convertible bonds due to low demand,” said Daniel Fan, a credit analyst at Bloomberg Intelligence. Sunac China’s equity placement could be a signal of investor demand for equity rather than bonds, including convertibles. Country Garden, which hasn’t issued any shares since Jan. 2018, has $425 million of 7.125% bonds due this month, Fan said.
The CSI 300 Real Estate Index dropped as much as 3.5%.
China Builder Logan’s Dollar Bonds Set for Biggest Drop in Two Months (10:30 a.m. HK)
Some of its dollar bonds are poised to log their biggest declines since November. Its 7.5% bond due Aug. 25 dropped 4.5 cents to 87.5 cents, according to Bloomberg-compiled data as of 10:26am in Hong Kong, on track for a seventh consecutive decline.
DaFa Properties Says $144.1m of 2022 Notes Validly Tendered (6:57 a.m. HK)
DaFa Properties Group Ltd. says $144.1 million of its 9.95% dollar note due Jan. 18, representing around 78% of total outstanding aggregate principal amount, were validly tendered for exchange.
The company decided to waive the minimum acceptance amount condition to its exchange offer, it said in a statement to the Hong Kong stock exchange. It will issue $138.4 million of new notes at 12.5% interest p.a. maturing on June 30.
Sunac Says It Can ‘Fully Meet Debt Obligations (11:30 p.m. HK)
Sunac China said it had total cash of around 160 billion yuan at the end of 2021 and “can fully meet short term debt obligations and project development needs,” according to a company statement.
Evergrande Unit Holders Back Yuan Bond Payment Delay (8:08 p.m. HK)
Bondholders of more than half of the note’s 4.5 billion yuan principal agreed to a proposed payment extension, the developer’s Hengda Real Estate Group Co. unit said in a Shenzhen stock exchange filing. The firm had a Jan. 8 deadline to meet investor demands for early repayment before seeking a delay last week, and a vote on the extension offer had been extended to Thursday.
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