HONG KONG / SHANGHAI, NOVEMBER 8 (Reuters) – Some holders of offshore bonds issued by a developer of the developer China Evergrande Group (3333.HK) had not received interest payments due on November 6, Monday morning in Asia, two people familiar with said the case.
Scenery Journey Ltd was to make semi-annual coupon payments on Saturday worth $ 82.49 million on its 13% November 2022 and 13.75% November 2023 US dollar bonds. ,
Failure to pay interest by 6 November would have started a 30-day deadline for payment.
Twice in October, Evergrande averted catastrophic defaults on its $ 19 billion bonds in international capital markets by paying off coupons just before the deadlines expired.
Such a period expires on Wednesday, November 10, for more than $ 148 million in coupon payments that had fallen due on October 11. Evergrande will also make coupon payments totaling more than $ 255 million on its bonds in June 2023 and 2025 in December. 28.
An Evergrande spokesman did not immediately respond to a request for comment. The sources could not be named as they were not authorized to speak to the media.
Reuters was unable to determine whether Evergrande has told bondholders what they plan to do regarding the coupon payment due on Saturday.
BONDS, SHARES FALL
Evergrande’s shares fell on Monday, ending the morning down 0.9%. They have fallen almost 85% this year. Duration Finance data showed that the company’s dollar bonds continued to trade at discounts of around 75% from the nominal value on Monday.
Once China’s best-selling developer, Evergrande, has fallen in debt by more than $ 300 billion, and liquidity problems have reverberated across the country’s $ 5 trillion real estate sector, leading to a number of offshore debt defaults, credit rating downgrades and divestments in the country. . developers’ shares and bonds in recent weeks.
Spreads on Chinese corporate high-yield dollar debt (.MERACYC) rose to record highs on Friday, and on Monday data from the Shanghai Stock Exchange showed that developer bonds again dominated the list of today’s biggest losers. One yuan bond issued by a country unit of the Shimao Group (0813.HK) was suspended from trading after falling more than 34%.
Falls even extended to the name of investment grade. Tradeweb data showed that a bond of 4.75% January 2030 issued by a unit of Sino-Ocean Group Holding (3377.HK) fell almost 15% on Monday to just over 75 cents. Sino-Ocean is rated “BBB” by Fitch Ratings and has a “Baa3” rating from Moody’s Investors Service.
Nomura economists Ting Lu and Jing Wang said in a note that they expected “much higher” repayment pressure on developers in the coming quarters, almost doubling from $ 10.2 billion in the fourth quarter of 2021 to $ 19.8 billion and 18.5 billion in the first and second quarters. respectively 2022.
“With the deteriorating real estate sector, we can see a decline in defaults on land from developers, and bond prices in land and offshore markets can increasingly affect each other as investors are on guard,” they said.
“We believe regulators are likely to step up their efforts to avoid increasing defaults in China’s (offshore commercial dollar bonds) market.”
Regulators in October asked developers to proactively prepare for the repayment of both principal and interest on their foreign bonds and to “jointly maintain their own reputation and general market order.” read more
Reporting by Clare Jim and Andrew Galbraith; Editing Muralikumar Anantharaman
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