China Developer Sued, Shares Eye Weekly Loss: Evergrande Update

(Bloomberg) -- A Chinese developer has been sued by a Singapore bank over a loan-repayment demand, in the latest sign that creditors to the nation’s distressed property firms are growing increasingly impatient.

Oversea-Chinese Banking Corp. filed a claim against Shimao Group Holdings Ltd. and a unit regarding a revolving credit facility agreed to in October, according to a Hong Kong court filing last week by OCBC. Elsewhere, China Evergrande Group’s onshore unit will next week meet with holders of a yuan bond to vote on a proposed interest payment extension.

After another rough week for Chinese markets, focus is on what policy makers may do next. Optimism generated by Beijing’s support pledges last month has continued to falter. A Bloomberg Intelligence index of developer shares looks poised for a second consecutive weekly decline, despite edging higher Friday.  

Key Developments:

• China CSRC Vows to Ensure Stable Operation of Capital Market
• China’s Plunging Markets Trigger Capital Flight
• Debt Insurance Costs Jump as Market Gauges Risk of Hard Landing
• Chinese Developer Shimao Sued by OCBC Over Outstanding Loan
• China Needs ‘Rapid’ Policy Steps if Any Market Rebound to Last
• Times China Says It Has Repaid Dollar Bond Due April 20
• Evergrande Unit Plans Creditor Meeting on Payment Extension
• Zhenro Gets Approval to Extend Repayment for Bulk of a Yuan ABS

Times China Arranges Funds to Repay Notes Due April 26 (5:31 p.m. HK)

Times China has arranged the remittance for the repayment of all outstanding principal amount and accrued interest of the 5.75% notes due April 26, according to a filing to HKEX.

Meanwhile, three holders of a Times China onshore unit’s 467m yuan ABS tranche due Friday told Bloomberg News they’ve received principal and interest. A Times China’s IR representative didn’t immediately respond to a request for comment.

KWG Group Downgraded to B by Fitch (5:11 p.m. HK)

KWG Group’s long-term issuer default rating was downgraded by Fitch to B from B+.

The senior unsecured debt rating was downgraded to B from B+. Ratings remain on watch negative.

Chinese Developer Shimao Sued by OCBC Over Outstanding Loan (1:17 p.m. HK) 

Oversea-Chinese Banking Corp. filed a claim against Shimao and a unit regarding a revolving credit facility agreed to in October, according to a Hong Kong court filing last week by OCBC. 

After demanding repayment of $100 million plus interest in January from the unit, which borrowed the funds, principal of $49.2 million had yet to be repaid by March 2 and the bank is seeking that amount plus interest, the filing said.

Luxury builder Shimao had long been considered one of China’s healthier property firms, and its mounting debt problems have been seen as a bellwether for financial contagion in the nation’s embattled property industry.

China Needs ‘Rapid’ Policy Steps if Any Market Rebound to Last (9:48 a.m. HK)

The slump in Chinese equities and corporate bonds is paring a rebound which lasted for a couple weeks from mid March and that was sparked by vows for policy action. But patience for more details is wearing thin, intensifying growing capital outflows. 

Any renewed rally ahead could only be sustained if concrete and significant policy steps were taken rapidly, according to Jean-Louis Nakamura, the chief investment officer for the Asia Pacific region at Lombard Odier.

Times China Says It Has Repaid Dollar Bond Due April 20 (8:58 a.m. HK)

Times China Holdings Ltd. has repaid a dollar bond which was due Wednesday, the Chinese developer told Bloomberg in a written statement Friday. There was $166.8 million of principal outstanding, according to compiled data. 

Hengda Real Estate to Hold Creditor Meeting (8:00 a.m. HK)

Hengda Real Estate Group Co., Evergrande’s onshore unit, will hold a meeting on April 25-26 with holders of its 8.2 billion yuan bond to vote on proposal for repayment extension, Hengda said in a filing. The proposal would extend interest payment for the period between April 27, 2021, and April 26, 2022, by six months until Oct. 27

Zhenro Gets Approval to Extend Repayment of Security (6:00 a.m. HK)

The developer’s onshore unit will delay repaying most of a 627 million yuan asset-backed security tranche by a year, according to a filing to the Shanghai Stock Exchange’s private disclosure system.

The proposal was to pay accrued interest and 10% of the principal on Friday’s original maturity date, with the balance to be delivered on April 22, 2023, the document said. 

©2022 Bloomberg L.P.