(Bloomberg) -- Three units of troubled Chinese property developer Kaisa Group Holdings Ltd. will resume trading this morning in Hong Kong, saying that any liquidity issues faced by the parent company won’t have a material impact on their operations.
The units are Kaisa Prosperity Holdings Ltd., Kaisa Health Group Holdings Ltd. and Kaisa Capital Investment Holdings Ltd., according to separate filings to the Hong Kong stock exchange late Monday. Meanwhile, at least some of Kaisa’s creditors have yet to receive bond interest due last week.
Shares of Chinese developers retreated on Monday, underscoring how property companies are increasingly prioritizing debt-servicing over protecting their stock valuations as they look to ease a liquidity crunch that’s roiled global markets. Bonds rallied even as data showed sharper declines in the country’s home prices.
Key Developments:
- Property Crackdown Is Dragging China’s Economy to 1990 Lows
- Panic Is Fading Fast in Chinese Junk Dollar Bond Market
- Kaisa Units to Resume Trading; Parent Remains Halted
- China Junk Bonds Add to Biggest Weekly Rally Since March 2020
- Stressed China Developers Sell Stock, Cut Dividends for Cash
Panic Fading Fast in Junk Bond Market (8:48 a.m. HK)
Signs of stability are emerging in China’s junk dollar bonds as bets on policy easing assuage concern over a wave of defaults by property firms. The notes are yielding less than 20%, down from a high of almost 25%, with a Bloomberg index tracking China’s junk dollar market erasing its November losses.
China State-Run Developers Rush to Sell Yuan Debt (8:15 a.m. HK)
Chinese state-owned developers are about to test investor demand for yuan bonds with a flood of issuance.
China Merchants Shekou Industrial Zone Holdings Co., Poly Developments & Holdings Group Co. and Bright Real Estate Group Co. received approval to sell a combined 8.6 billion yuan ($1.3 billion) of local bonds on the interbank market this week. If successful, that would make November the strongest for issuance in eight months.
Positive demand for the bonds could prompt other property firms to follow suit, potentially easing a historic liquidity crunch in pockets of the real estate sector.
Kaisa Units to Resume Trading; Parent Remains Halted (7:55 a.m. HK)
Three units of Chinese property developer Kaisa Group Holdings Ltd. - Kaisa Prosperity, Kaisa Health and Kaisa Capital Investment -- will resume trading at 9 a.m. Hong Kong time Tuesday, according to separate filings to the Hong Kong stock exchange late Monday.
The companies said they haven’t received financial assistance from Kaisa Group and any liquidity issues faced by the parent wouldn’t have a material adverse impact on their operations.
Kaisa Has Yet to Pay Interest Due Last Week (1:50 p.m. NY)
At least some of Chinese developer Kaisa’s creditors haven’t received bond interest that was due last week, according to people with knowledge of the matter, starting the clock on a 30-day grace period before a default.
As of 6 a.m. in New York on Nov. 15, investors in Kaisa’s dollar bonds had yet to receive their payments, said the people, who asked not to be named discussing a private matter. The developer had coupon payments totaling $88.4 million due on Nov. 11 and Nov. 12.
UBS Money Managers to Exit After Fund Hurt (5:23 p.m. HK)
Two UBS Group AG portfolio managers are leaving after a $3 billion fund got caught up in China’s high-yield bond meltdown.
Singapore-based Jiayi Yew and China-based Brian Lou will depart the bank in January, a UBS spokesperson said. Both report to Ross Dilkes, the lead manager of the Asian High Yield fund who is also leaving the firm after about 16 years.
A look at Evergrande’s maturity schedule:
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