Property Deliveries Boost Struggling Developer: Evergrande Update

(Bloomberg) – The delivery of real estate projects by China Evergrande Group from July to October could indicate some normalization in working capital and cash flow, wrote analysts at Bloomberg Intelligence led by Daniel Fan.

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According to analysts, this could increase his chances of meeting the next bond coupon payments for the year.

Chinese real estate stocks rose after the Shanghai Securities Journal quoted an unidentified government agency as saying that lending to the real estate sector “broadly recovered to normal levels” in October.

The CSI 300 real estate index climbed 3.2% while struggling developer Kaisa Group jumped 18%, its biggest gain since September 2017.

Two other Chinese developers are trying to appease bondholders with early debt repayment as stress mounts in the struggling real estate industry and defaults hit record highs.

For a schedule on bond interest and principal payments due in November, see here.

Key developments:

  • Chinese developers jump to the fact that state media loans are ‘normal’

  • Top-tier Chinese developer dollar bond spreads narrow

  • Two more Chinese developers pay off bonds early as yields rise

  • Struggling Chinese developers struggle to sell billions of assets

Evergrande Project Delivery May Normalize Liquidity: BI (1:15 p.m. HK)

The delivery by China Evergrande Group of 184 real estate projects from July to October could indicate some normalization in working capital and cash flow, wrote analysts at Bloomberg Intelligence led by Daniel Fan. It delivered over 7,800 units in September and 7,568 units in October.

The gradual normalization of the developer’s working capital could increase its chances of meeting the next bond coupon payments for the year, analysts say.

Top Chinese Developer Dollar Bond Spreads Tighten (12:50 HK)

The dollar bond spreads of some Chinese developers narrowed on Wednesday morning, following recent declines in the sector alongside publicly traded peers.

Strength was also seen among dollar banknotes from some high-yielding developers, with Evergrande and Logan Group Co. among the winners.

Chinese developers jump on state media report (11:35 a.m. HK)

Chinese real estate stocks rose after the Shanghai Securities Journal quoted an unidentified government agency as saying that lending to the real estate sector “picked up roughly to normal levels” in October.

The CSI 300 real estate index climbed 3.2% while struggling developer Kaisa Group jumped 18%, its biggest gain since September 2017.

Two more Chinese developers pay off bonds early as yields rise (11 a.m. HK)

Two other Chinese developers are trying to appease bondholders with early debt repayment as stress mounts in the struggling real estate industry and defaults hit record highs.

Logan offered to repay a $ 244 million 5.75% bond due Jan. 3 at face value plus accrued interest, according to an exchange record. Ronshine China Holdings Ltd. said it has spent more than $ 23 million in the past two weeks to buy back several dollar bonds ahead of maturity after being downgraded by Fitch Ratings Inc.

Chinese home loans return to normal: Securities Journal (8:30 a.m. HK)

China’s lending to the real estate sector “virtually returned to normal levels” in October after slow growth earlier this year, the Shanghai Securities Journal reported, citing an unidentified government agency. The scale of loans increased significantly in October, according to the newspaper.

Struggling Chinese Developers Struggle to Sell Billions of Assets (8:15 a.m. HK)

Real estate developers in China looking to raise much-needed cash by selling assets are struggling to close deals as buyers accumulate funds after plummeting home sales and Beijing has stepped up its crackdown on borrowing.

Evergrande ended talks last month to sell a controlling stake in his property management company that has reportedly raised around $ 2.6 billion. A plan to unload a trophy office tower in Hong Kong also stumbled, while Modern Land China Co. defaulted on a $ 250 million bond last week after being unable to sell some assets, Cailian reported. . Oceanwide Holdings Co. is seeking to unload its main office complex in Beijing after one unit fails.

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