Zhenro Defaults on Dollar Bond Payments: Evergrande Update

Residential buildings at a Zhenro Properties Group Ltd. development in the Jinshan district of Shanghai, China, on Thursday, Feb. 24, 2022. Zhenro is asking bondholders for more time to pay back about $1 billion in debts due to mature this year, citing liquidity pressure. Photographer: Qilai Shen/Bloomberg , Bloomberg

Patrick Winters, Bloomberg News

Apr 10, 2022

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(Bloomberg) -- Zhenro Properties Group Ltd. defaulted for the first time after saying it was unable to pay interest on two dollar bonds before a grace period ended Saturday and warned it might not be able to meet three other coupons because of its liquidity woes.

Meanwhile, embattled developer Fantasia Holdings Group Co. and its Colour Life unit said they plan to review their business, including possible asset disposals, with a Guangdong state-backed firm.

Chinese real estate stocks rallied Friday, with a Bloomberg gauge jumping 4.1% amid JPMorgan Chase & Co.’s upbeat assessment of the sector’s equity outlook. 

Key Developments:

  • Zhenro Doesn’t Make $20.4 Million of Bond Interest Payments (1)
  • Aoyuan Aims to Soon Have Offshore-Debt Restructuring Plan: REDD
  • Global Funds Cut China Bond Holdings by Record as Premiums Erode
  • China Developer Shares Rise as JPM Expects 20% Upside, Upgrades
  • Pricing on Some China Property Bonds Is ‘Too Pessimistic’: Pimco

Fantasia to Review Debt With Guangdong Govt-Backed Firm (8:18 a.m. HK)

Fantasia Holdings Group Co. and its majority-owned Colour Life property management arm entered agreements with Gortune Alternative Fund Management to conduct a review on the financial position and formulate plans for possible asset disposals, according to a Hong Kong stock exchange filing.

Gortune Alternative is 40%-held by its single largest shareholder Gortune Investment, which was set up in 2016 under the Guangdong government’s guidance. Gortune Alternative will also promote implementation of the overall debt restructuring plan and facilitate communication with Fantasia Group’s creditors.

Zhenro Defaults After Missed Interest Payments (7:45 a.m. HK)

The Chinese builder, which in February asked holders of about $1 billion of bonds set to mature this year for more time to repay, said in a Hong Kong stock exchange filing Sunday it didn’t pay a combined $20.4 million of interest on two dollar bonds. That has resulted in events of default, according to the company. 

Zhenro also said it might not be able to pay a combined $32.6 million of interest due on three other dollar bonds before grace periods end between April 10 and May 14. Failure to meet the obligations would also constitute events of default, the company said. However, the firm said it intends to pay the interest due on all five notes by May 31.

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