(Bloomberg) — Shimao Group Holdings Ltd.’s bonds rallied after a report that the embattled developer has put 34 projects across China up for sale, as it seeks to raise billions of dollars amid debt-repayment pressures.
One of China’s largest issuers of bonds in the offshore debt market among developers, Shimao is one of a string of companies trying to use asset sales to pay bills. The industry is working through a liquidity crunch in the wake of a government crackdown on excessive borrowing and speculation in the housing market. Regulators see asset sales as key to easing a crisis that might impede economic recovery.
China Evergrande Group urged offshore bondholders not to adopt aggressive legal action over repayments and asked for more time to make a risk disposal plan, after a group of overseas creditors threatened enforcement measures.
Key Developments:
- Shimao Puts $12 Billion of Assets Up for Sale, Caixin Says
- Evergrande Set for Long, Painful Restructuring: Company Outlook
- Jingrui Holdings Downgraded to B3 by Moody’s
- Developers Face Make-or-Break Moment: What to Watch in China
- Evergrande Seeks Patience From Global Investors on Repayment
- Shanghai Shimao to Change Auditor for First Time in 27 Years
- China Buys a Little Time for Cash-Strapped Developers: Shuli Ren
- Health & Happiness Not Proceeding With Planned USD 5Y Bond Sale
Shimao Dollar Bonds Jump After Report of Projects Up for Sale (3:18 p.m. HK)
Shimao’s dollar notes rallied further Tuesday, putting some on course for their highest levels in three weeks, following a Caixin report that the developer has put $12 billion of assets up for sale.
China Junk Dollar Bonds Poised for Longest Uptrend Since July (3:09 p.m. HK)
Chinese high-yield dollar bonds rose as much as 1.5 cents on the dollar Tuesday, according to credit traders, putting the market on track for its longest winning streak in six months.
A Bloomberg index of the sector rose for a fourth day Monday; it hasn’t climbed for five straight sessions since July.
Shenzhen SOE Drafts Purchase Plan with Kaisa Unit: Cailian (1:26 p.m. HK)
Shenzhen Investment Holdings, a company owned by the local city government, has drafted a preliminary acquisition framework with Kaisa Culture Sports & Technology Group, Cailian reported. Investors will roll out detailed investment terms before due diligence, according to the report, which didn’t give details about the planned deal.
China HY Credit Less Bearish Now, But Not Yet Bullish: BlackRock (10:35 a.m. HK)
China’s high-yield credit market doesn’t have a very bullish case, “but it’s not as bearish as it was three or six months back,” according to Neeraj Seth, head of Asian Credit at BlackRock.
Recent policy shifts have reduced some short-term systematic risks, but they could still lead to more defaults and restructurings and favor higher-quality names in the sector, he said during a Bloomberg TV interview Tuesday.
Logan Says Private Bond Guarantees Do Not Exceed $1b (10:30 a.m. HK)
Logan Group Co. told investors Friday that it guaranteed no more than $1 billion in private placement notes, according to a report by REDD. The company’s management disclosed the amount in a call with investors on Friday following market rumors that the level ranged from $2 billion to $3 billion, REDD reported, citing two sources briefed on the matter.
Developers Face Make-or-Break Moment (8:44 a.m. HK)
The upcoming earnings season for Chinese developers will be make-or-break for many firms as auditors examine their books for the first time since the liquidity crisis spread.
Auditors will be focused on firms’ ability to deliver homes, as well as their cash flow and liquidity estimates, according to Citi note dated Monday. But the lack of visibility for many property firms complicates their accounting. Auditors are likely to only sign off on the report on the last day required by the Hong Kong exchange — March 31.
Shimao Seeks Billions of Dollars From Asset Sales, Caixin Says (8:14 a.m. HK)
The assets are residential, office, commercial and hotel projects in 17 cities including Beijing, Shanghai and Hangzhou and in the Greater Bay Area in southern China, Caixin cited documents as saying.
Shimao is asking for 42.2 billion yuan ($6.7 billion) for 15 of the projects, the report said. The remaining 19 are either joint ventures or projects in an initial investment stage in which the developer has invested a combined 32.5 billion yuan, it said.
Evergrande Seeks More Time From Offshore Investors on Repayment (8 a.m. HK)
The developer is seeking more time from overseas investors to fully consider uncertainties and risks in order to make a debt risk disposal plan that will protect the interests of various parties, the company said in a statement.
Evergrande is drafting a detailed debt restructuring plan and is actively maintaining dialog with offshore creditors, it said. The company faced coupon payment deadlines totaling $352.5 million on Monday.
CIFI Holdings Repays 5.5% Senior Notes Due 2022 in Full (6:35 a.m. HK)
CIFI Holdings Group Co. fully paid off its $240 million 5.5% note that matured Sunday, together with interest, the builder said in a stock exchange filing late Monday. The company expects no material impact on its financial position after redemption.
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