UBS Analyst Who Took On Evergrande Now Bullish on China Property
When it comes to Chinese real estate, John Lam is a lone wolf.
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When it comes to Chinese real estate, John Lam is a lone wolf.
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Nov 28, 2021
Bloomberg News
,(Bloomberg) -- China’s stressed developers face nearly $1.3 billion of bond payments in December, after a month in which investor sentiment toward the property sector showed signs of stabilizing despite fresh signs of liquidity pressure.
The total was $2 billion in November, and there have been no defaults reported according to Bloomberg-compiled data as of Friday, after multiple instances in October. Still, investor scrutiny persists regarding principal and interest payments as a cash crunch engulfs the real estate industry. Center stage is China Evergrande Group and Kaisa Group Holdings Ltd., two of the country’s biggest dollar-bond issuers. An Evergrande unit and Kaisa have grace periods ending by mid-December on a combined $170.9 million of coupons.
November saw yields on a Bloomberg gauge of riskier notes surge to a record 24.6% early in the month before pulling back, amid signals that softer policies are on the way for property firms. But at around 20%, yields remain too high for most builders that need to refinance imminently maturing debt. Meanwhile, billionaire owners of Chinese developers have dipped into their own pockets and a reported plan to loosen controls for builders issuing local-currency bonds is likely to benefit only higher-quality firms, say analysts.
Below is a week-by-week calendar for principal and coupon payments due on dollar and local bonds for firms among the top 16 developers whose debt offers the worst year-to-date returns on a Bloomberg index of China high-yield dollar bonds. Some coupons may have grace periods unless otherwise stated, and the data excludes defaulted firms and those with less than $500 million of dollar bonds outstanding.
Week 1 (Nov. 29-Dec. 5) - $198 million
Week 2 (Dec. 6-Dec. 12) - $598.4 million
Week 3 (Dec. 13-Dec. 19) - $15.1 million
Week 4 (Dec. 20-Dec. 26) - $34.1 million
Week 5 (Dec. 27-Dec. 31) - $414.1 million
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