Distress Levels Mount; Bond Vote Delayed: Evergrande Update

(Bloomberg) -- Distress is mounting in China’s $870 billion offshore debt markets as more property firms miss debt payments and record refinancing costs effectively block them from rolling over borrowings, according to Bloomberg’s credit tracker.

A unit of China Evergrande Group meanwhile has extended voting to Jan. 13 on the issue to delay the early repayment of a bond, according to an exchange filing. Longfor Group Holdings Ltd. plans to sell domestic bonds.

Shares of real estate firms rebounded late Monday, with Shimao Group Holdings Ltd. seeing a record one-day gain of 19% on a report that larger rival China Vanke Co. may buy some assets from the struggling firm. Shimao was downgraded by Moody’s Investors Service and S&P Global Ratings, among several ratings cuts for developers.

There are $1.42 billion of bond payments due this week among stressed builders, Bloomberg calculations show.

Key Developments:

• Drop in Land Purchases May Signal Cash Woes for China Developers
• Vanke Could Limit Cash Outlay in Potential Shimao Deal: React
• Chinese Developers’ Yuan Bonds Rise as Guangdong Encourages M&A
• Crisis Flares at China Builder Modern Land After Debt Demand
• Shimao Appoints Agents to Speed Up Asset Disposal on Debt Woes
• Guangdong Set Up Match-Making Meeting for Developers: Cailian
• Chengdu Property Chamber Held Meeting on Building Corp. Credits
• Shimao Group Cut to B- by S&P on Liquidity Expectations 

Evergrande Unit Extends Bond Repayment Vote (7:30 a.m. HK)

Hengda Real Estate, Evergrande’s onshore unit, has extended voting on the issue to delay the early repayment of a 2023 6.98% yuan bond to Jan. 13, according to an exchange filing. 

• Company held an online creditor meeting for the onshore bond Jan. 7-10
• Bondholders will vote on the proposal to delay early bond repayment to July 8 from Jan. 8 in the original schedule

Distress Mounts in China Debt Market (7:20 a.m. HK)

Distress is mounting in the nation’s $870 billion offshore debt markets as more property firms miss debt payments and record refinancing costs effectively block them from rolling over borrowings.

Stress levels in the overseas credit market climbed back to the highest possible reading in Bloomberg’s China credit tracker in December, as two giants -- China Evergrande Group and Kaisa Group Holdings Ltd. -- defaulted on dollar bonds.

The turmoil has prompted authorities to ease some restrictions on the property market, which accounts for about a quarter of output in the world’s second-largest economy. At the same time, policy makers have signaled they remain committed to cutting excessive borrowing by property firms and discouraging speculation in the housing market.

Longfor to Sell Domestic Bonds (7:10 a.m. HK)

Longfor Group Holdings Ltd. plans to sell 6-year domestic corporate bond at 3.15% to 4.15% coupon, according to a statement to the Hong Kong stock exchange.

• 8-year bond will have coupon in the range of 3.60% to 4.60%

Evergrande Says Company Registration Remains (9 p.m. HK)

Evergrande ended its lease at the Zhuoyue Houhai Center in Shenzhen in December to save on costs, the company said in a statement on Monday evening. The developer moved its office to another property it owns in Shenzhen and the company’s registration remains in that city. Earlier, the Paper reported, citing unidentified people, that Evergrande moved its headquarters to Guangzhou after the developer withdrew from its Shenzhen main building last month.

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