Shadowy Firms Buy More Land; Investors Meet: Evergrande Update




  • In Business
  • 2022-01-26 05:17:05Z
  • By Bloomberg

(Bloomberg) -- Finance firms owned by China's local governments have become massive buyers of land for real estate development, filling a void left by developers and exacerbating risks for the $8.4 trillion sector. China Evergrande Group is holding a conference call with investors Wednesday, according to people familiar with the matter.

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Financial advisers including China International Capital Corp. are listed on the call's invitation, said the people, who asked not to be identified. The embattled builder didn't pay coupons initially due Monday on two dollar bonds, said noteholders.

The International Monetary Fund meanwhile warned that a protracted housing downturn in China is a key risk to the global economy, along with Federal Reserve tightening.

Shimao Group Holdings Ltd.'s notes fell after a Debtwire report that the developer hired Deloitte LLP as a financial adviser at the request of its syndicated loans' offshore holders.

Key Developments:

  • Shadowy China Firms Spend Billions on Land Shunned by Developers

  • Shimao's $74 Million Placement Limit a Hurdle to Cash-Crunch Fix

  • Redsun Dollar Bonds Up Most Since October After Buyback News

  • Evergrande Bondholders Didn't Receive Dollar Coupons due Monday

  • China Real Estate Asset Sales Prices Imply High Bond Recovery

  • IMF's Outlook Has Stern Warning on Chinese Housing: China Today

Evergrande Bondholders Didn't Receive Dollar Coupons (11:53 a.m. HK)

Some holders haven't received dollar-bond coupon payments due Monday for two Scenery Journey notes, according to investors who hold the securities.

The interest payments concerned are on a 11.5% note due October and a 12% note due 2023, Bloomberg-compiled data show. Both bonds have a 30-day grace period for payment.

C&D Prices Bond to Help Fund Property Deals (11:15 a.m. HK)

C&D Real Estate Corp. raised 1 billion yuan ($158 million) via a local bond sale to finance property-related mergers and acquisitions, according to a company statement dated Tuesday.

The company sold a 600 million yuan tranche at a coupon of 3.48%, with a put option exercisable at the end of the third year, according to people familiar with the matter who are not authorized to speak publicly and asked not to be identified.

Shadowy China Firms Spend Billions on Land (8:20 a.m. HK)

Across China, local government financing vehicles have replaced cash-strapped property developers as the biggest buyers of land for real estate development, stoking fresh concerns over the ability of these off-balance sheet borrowers to repay a debt pile that tops $8.4 trillion by some estimates.

While the moves may help arrest a land sale slump and provide much-needed revenue for local governments, the purchases threaten to exacerbate risks for LGFVs -- the second-biggest non-financial borrowers in the offshore market and the biggest onshore.

IMF Has Stern Warning on Chinese Housing (8:15 a.m. HK)

The two most-important variables for global macro investing are perhaps Federal Reserve policy and China's housing, which contributes the lion's share to the world's second-largest economy. Indeed, the International Monetary Fund's latest outlook warned that a protracted housing downturn in China is one key risk to the global economy, along with Fed tightening.

On Tuesday, the IMF cut its global growth forecast for this year, citing weaker prospects for the U.S. and China. It reduced China's forecast to 4.8%, from 5.6% in October, because of lower investment in real estate and tepid consumption as a result of Beijing's zero-Covid strategy. The IMF estimate is on the lower end of the spectrum of private-sector economists' forecasts. Several provinces have set their GDP target this year to at least 5%, fueling speculation that Beijing sees that number as the floor for growth.

Redsun Repurchases Dollar Bond Due April (8:05 a.m. HK)

Chinese developer Redsun Properties Group Ltd. said late Tuesday it's bought $48.2 million of its 9.95% dollar bond due April 11 so far this month, reducing the outstanding principal to $401.8 million, according to a stock exchange filing.

The note had seen strong gains in recent days. Some of its bonds were on pace for their biggest gains Wednesday in three months, according to data compiled by Bloomberg.

Tycoons Keep Building Hong Kong Offices (8 a.m. HK)

The world's most expensive office market has more empty floor space than ever.

Vacant office stock in Hong Kong climbed to a record high in December to 9.1 million square feet (845,000 square meters) -- equivalent to nearly 158 football fields, according to real-estate services provider CBRE Group Inc.

China Regulator Vows to Step Up Oversight (7:45 a.m. HK)

China will continue to strengthen financial oversight to "firmly forestall" systemic risks, according to a statement on the website of the banking and insurance regulator.

  • Proper supervision work this year will "ensure overall economic, financial stability and is of great significance"

  • Reiterates its vow to improve the long-term mechanism of keeping land and housing prices stable

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