Shares Fall for Fifth Week; Developer Bonds: Evergrande Update

(Bloomberg) -- Shares in China Evergrande Group extended a streak of weekly declines to five, the longest run since September, as Hong Kong’s stock market closed early for Christmas. 

The cash-strapped developer has seen its shares slide 90% this year. Having been labeled a defaulter for the first time earlier this month, it is working to prioritize payments to migrant workers and suppliers as regulators urge the firm to head off any risk of social unrest. State-owned developers may be forced to take over some Evergrande projects next year to ensure homes are delivered to their buyers, according to Bloomberg Intelligence.

A trickle of dollar bond sales from Chinese developers in December signals that some investor demand still exists for certain firms, despite elevated yields effectively shutting the market to many builders amid the sector’s financial woes. A Bloomberg index of Chinese property shares fell, paring its weekly advance to 1.1%. 

Key Developments:

• Trickle of China Developer Bond Sales Shows Selective Demand
• Jinke Properties Sells 800m Yuan of 270-Day Bond at 6.8%
• Developer China SCE Issues Additional $150 Million of 2024 Bond
• Overdue Fees Paid at Evergrande’s Former Hong Kong Project: HK01
• 2022 Looks Just as Bad for Stock Market: What to Watch in China

Evergrande’s Services Unit Stake Falls (2:59 p.m. HK) 

Evergrande’s stake in its property services unit fell to 58.18% from 60.96%, according to a disclosure filing. Unspecified enforced actions were taken on 300 million shares the developer held in the unit on Dec. 20, the filing said.

Sunac China Said to Wire Funds for Four Private Bonds (11: 57 a.m. HK)

Sunac China Holdings Ltd. plans to transfer funds to its offshore account for four private bond payments totaling $620 million due Dec. 29 and 30, according to REDD, citing three sources briefed by the company. 

Investors of the private bonds include GIC and Warburg Pincus, according to the report. 

Trickle of China Developer Bond Sales Shows Selective Demand (10:04 a.m. HK)

There have been a handful of small offerings from Chinese developers in December. Powerlong Real Estate Holdings Ltd., a Shanghai-based builder, tapped the offshore market twice this month with additional issuance of two dollar bonds. Greentown China Holdings Ltd. and Greenland Holdings Corp. both priced new dollar notes earlier this month. All four borrowers are among China’s top 40 developers by contracted sales. 

China SCE Group Holdings entered into an agreement Thursday to sell an additional $150 million of its 5.95% 2024 dollar bond, bringing the total outstanding amount of the note to $450 million, according to a Hong Kong stock exchange filing. China SCE ranks 38th among peers in China by contracted sales, according to China Real Estate Information Corp.

Overdue Fees Paid at Evergrande’s Former Hong Kong Project: HK01 (7:47 a.m. HK)

VMS Group, which took over Evergrande’s Hong Kong residential project “The Vertex”, has paid overdue commissions to property agencies, HK01 reports, citing announcements from four agencies.

Centaline Property, Midland Realty, Ricacorp Properties and Hong Kong Property Services have received about HK$17.5m ($2.24m) in commissions related to the project located in Cheung Sha Wan. The agencies halted proceedings against Evergrande seeking the overdue fees after the takeover.

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