(Bloomberg) -- China Evergrande Group’s risk management committee plans to hire additional financial and legal advisers to help the embattled developer deal with its debt stress and respond to creditors’ demands.
The announcement came a day after a bondholder group said Evergrande had failed to substantially engage with it on restructuring efforts. The group said it will “seriously consider enforcement actions” to protect investors’ interests and wants to be consulted before any more assets are sold.
A record-breaking rally in Chinese property bonds petered out on Thursday as investors raised doubts over how much a reported plan to grant developers greater access to funds from presold homes will benefit distressed firms. Chinese high-yield dollar bonds fell as much as 3 cents on the dollar, after jumping Wednesday when the reports of regulatory easing emerged.
Key Developments:
- Evergrande to Hire Advisers on Debt Risks, Creditor Demands
- China Paper Calls For Flexible Policy on Property Presale Funds
- China Banks Accelerate Approval of Mortgage Loans: Sec. Journal
- Evergrande Offshore Bondholders Criticize ‘Opaque’ Restructuring
- China Seeks to Ensure Frozen Assets Won’t Impede Home Building
Country Garden Sells Convertible Bonds (8:34 a.m. HK)
Country Garden is selling HK$3.9 billion ($500 million) of 4.95% secured guaranteed convertible bonds due 2026, according to a Hong Kong stock exchange filing.
The initial conversion price is HK$8.10 per share, representing a premium of 16.38% to the last close on Thursday. The net proceeds of about HK$3.86 billion will be used for refinancing existing medium- to long-term offshore debt, which will become due within one year.
China Paper Calls For Flexible Policy on Property Presale Funds (8:14 a.m. HK)
Local authorities can consider adjusting their policies on the use of property presale proceeds to stabilize the housing market, state-run Securities Times said in a commentary.
The policy should be adjusted in a flexible manner based on each city’s own situation, the report added.
Evergrande to Hire Advisers on Debt Risks, Creditor Demands (8:12 a.m. HK)
China Evergrande Group’s risk management committee plans to hire additional financial and legal advisers to help the embattled developer deal with its debt stress and respond to creditors’ demands.
The panel proposes to engage China International Capital Corp. and BOCI Asia Ltd. as financial advisers, and Zhong Lun Law Firm LLP as a legal adviser, the company said Friday in a statement to the Hong Kong stock exchange.
China Banks Accelerate Approval of Mortgage Loans: Sec. Journal (7:41 a.m. HK)
Banks in major Chinese cities from Beijing to Shanghai and Chongqing have accelerated approval of mortgage loans, China Securities Journal reported Friday. It now takes some banks only about a month for such approvals, much faster than before, the state-run newspaper said, citing officials at banks and real estate brokers.
Banks in some cities like Shenzhen have already cut their mortgage rates in response to the latest reduction in banks’ five-year loan prime rate Thursday, the report added.
Developer Bonds Ending Day on Downbeat Note (6:00 p.m. HK)
Bonds for some of China’s developers are ending Thursday on a down note. Country Garden’s 6.5% note due 2024 fell 1 cent on the dollar to 91 cents, after surging nearly 14 cents a day earlier, according to data compiled by Bloomberg. Sunac’s 6.5% note due 2023 was trading at around 61 cents Thursday after peaking at 69.6 cents, data compiled by Bloomberg showed.
Thursday’s reversal in bonds shows traders are wary of betting too strongly that the news of regulatory help marks a turning point for the beaten-down sector.
©2022 Bloomberg L.P.