Hui Sells Shares; Beijing Manages Message: Evergrande Update
(Bloomberg) -- China Evergrande Group chairman Hui Ka Yan was forced to sell pledged shares in the company, according to disclosures that came a day after the developer was officially labeled a defaulter for the first time.
Hui sold about 278 million shares on Dec. 6-9, equivalent to just over a 2% stake, according to filings to the Hong Kong stock exchange on Friday. His holding has now fallen to 59.8%. The developer has otherwise stayed silent about its default status, even as a barrage of commentary from China’s top institutions shows authorities are stepping up efforts to manage the international message on Evergrande’s crisis.
Shares of Evergrande and its property services unit closed 1.7% lower in Hong Kong. A gauge of Chinese real estate stocks retreated 1.5%, extending losses this year to 30%. Bonds issued by Evergrande were little changed Friday in Hong Kong, according to credit traders.
- What’s Next for China Evergrande, Crushed by Debt: QuickTake
- Evergrande’s Hui Forced to Sell Part of Stake in Defaulted Firm
- China Battles Against Hot Money With Swift Yuan Intervention
- China Tries to Manage Global Message on Evergrande Collapse
- Kaisa Unlikely to Take $2b Deal Offered by Group: Debtwire
- Evergrande-Related Stocks Drop as Developer Declared in Default
- Evergrande’s Biggest Broker in Clearing System Cuts Position
Moody’s Withdraws Fantasia’s Ratings (6:24 p.m. HK)
Moody’s has withdrawn Fantasia Holdings Group’s Ca Corporate Family Rating and the C senior unsecured ratings on the notes, due to “insufficient or otherwise inadequate information to support the maintenance of the ratings,” it said in a statement.
Prior to the withdrawal, the ratings outlook on Fantasia was negative, Moody’s said.
Hui Forced to Sell Part of Stake (5:33 p.m. HK)
Evergrande Chairman Hui Ka Yan was forced to sell pledged shares in the company, according to disclosures that came a day after the developer was officially labeled a defaulter for the first time.
The sale of 277.8 million shares brings Hui’s stake to 59.78% from 61.88%, filings to the Hong Kong stock exchange showed Friday. No transaction value was given.
“Steps have been taken to enforce a security interest in the shares, or rights to such shares held as security against” Hui, the filing said.
The transaction comes after Hui sold 1.2 billion shares in late November, his first divestment since Evergrande went public in 2009.
China Battles Against Hot Money With Swift Yuan Intervention (4:35 p.m HK)
Already fighting economic fires on a number of fronts, China is rushing to clamp down on speculation in its strengthening currency before it gets out of control.
In the midst of managing a property slowdown and two of the country’s largest-ever corporate debt restructurings, the last thing Beijing needs is a rapidly appreciating yuan. China’s central bank attempted to ward that off this week, first forcing banks to hold more foreign currencies in reserve, then setting the daily reference rate far weaker than estimates. It may need to do more.
The country’s pivot toward easier policy this month has sent hot money flowing into stocks and government bonds, helping push the yuan to the strongest in more than three years. Overseas investors bought $3.4 billion of yuan-denominated stocks on Thursday alone, just shy of an all-time high, while foreigners hold a record $375 billion in government bonds.
China’s Property Curbs to Hit Harder in North China: Nomura (4:26 p.m. HK)
Nomura expects the economic disparity between China’s northern and southern regions to widen further, saying property curbs should hit the former “much harder” as smaller cities are impacted more.
Limits on property market financing, as well as the country’s carbon-neutrality drive, could “result in a vicious cycle of rising defaults and slower growth in North China,” economists led by Rob Subbaraman wrote in the firm’s 2022 global economic outlook dated Friday.
China to Prioritize M&A in Property Bond Sales: Report (1:35 p.m. HK)
China’s National Association of Financial Market Institutional Investors told developers in a meeting Friday that it will prioritize bond sale registrations for M&A purposes or for funds to be used in projects that are under construction, the Securities Times reported, citing a person it didn’t identify.
China Tries to Manage Global Message on Evergrande Collapse (1:27 p.m. HK)
A barrage of commentary from China’s top institutions shows authorities are stepping up efforts to manage the international message on China Evergrande Group’s collapse -- even if the developer itself is staying silent about its default status.
English-language statements from agencies including the China Banking and Insurance Regulatory Commission, along with a recorded broadcast from People’s Bank of China Governor Yi Gang on Thursday, suggest Beijing is seeking to target global investors with a clear message: there won’t be a bailout of Evergrande, but the risks are ring-fenced.
Evergrande’s Biggest Broker in Clearing System Cuts Position (11:08 a.m. HK)
Haitong International Securities Co., a Chinese broker that holds the most Evergrande shares in Hong Kong’s clearing system, has reduced its position in the debt-laden developer this week.
The broker’s position in Evergrande was lowered by 225 million shares, according to the CCASS system. As of Thursday’s close, it reported a position of about 1.88 billion Evergrande shares in the clearing system, or a 14.24% stake in the company, versus 2.11 billion shares last Friday.
Kaisa Unlikely to Take Deal Offered by Group: Debtwire (10:05 a.m. HK)
Kaisa will probably reject a rescue package worth up to $2 billion from a group of bondholders advised by Lazard Ltd. as it would only provide a solution for short-term debt, Debtwire reported Thursday, citing unidentified people.
The proposed package deals only with Kaisa’s $400 million note due Dec. 7 and perhaps some other bonds due early next year, two of the people told Debtwire. Some large bondholders have decided not to join the group, and at least two real money funds have recently tapped out, the people said.
A look at Evergrande’s maturity schedule:
|Dollar bonds||Coupon due date||Grace period ends|
|TIANHL 13% due 2022||Nov. 6||Dec. 6||41.93|
|TIANHL 13.75% due 2023||Nov. 6||Dec. 6||40.56|
|EVERRE 7.5% due 2023||Dec. 28||Jan. 27||50.43|
|EVERRE 8.75% due 2025||Dec. 28||Jan. 27||204.77|
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