China developers propose offshore debt maturity extension, restructuring to regulators - sources

Modern Land (China)

27/10/2021 09:49

BEIJING/HONG KONG, Oct 27 (Reuters) - Some Chinese property
developers have voiced their intention to the regulators to
extend their offshore bond maturities or undertake a debt
restructuring, two sources with knowledge of the matter said, as
a growing number of defaults hits the sector.
    The developers proposed the ideas at a  meeting jointly held
by the National Development and Reform Commission (NDRC) and the
State Administration for Foreign Exchange (SAFE) on Tuesday,
said the sources.
    It was not immediately clear which developers raised those  
proposals, and what decision the regulators would settle on.
    The regulators, however, told developers facing large
offshore debt maturity to evaluate their repayment risks and
report difficulties, the sources said, declining to be named due
to sensitivity of the matter.
    The development underlines the frenetic behind-the-scenes
efforts by the debt-laden developers and Chinese regulators to
contain the fallout centred around embattled China Evergrande
Group  3333.HK , as worries over the liquidity crisis in the
property sector mount.
    "Developers were asked to report in great details about all
their offshore bond repayment plans; they need to voice out if
there are particular payments (for which) they're seeing some
difficulties in repayment," one of the sources said.
    NDRC said in a statement late on Tuesday that the regulators
have asked the unnamed companies in the meeting to optimise
their foreign debt structures and proactively prepare for
repayment of both principal and interest on their foreign bonds.
    They told the foreign debt issuers to use funds for approved
purposes and "jointly maintain their own reputations and the
overall order of the market".
    Details of the meeting, including proposals from the
developers who attended the meeting, have not been disclosed.
    The meeting with the regulators took place in Beijing on
Tuesday against the backdrop of developers Fantasia Holdings
Group  1777.HK , Sinic Holdings  2103.HK  and Modern Land
 1107.HK  defaulting on their maturing dollar bonds this month.
    The liquidity crisis in China's $5 trillion property sector
has been, in part, fuelled by Evergrande, which is teetering on
the brink of collapse with more than $300 billion in debt and is
struggling to meet payment obligations.
    SAFE and NDRC did not respond to Reuters request for
comment.
    A total of eight developers including Kaisa Group  1638.HK ,
Shimao  0813.HK  and Sino-Ocean Group  3377.HK  attended the
meeting on Tuesday, financial media outlet Caixin reported on
Wednesday.
    China Vanke  000002.SZ , Central China Real Estate  0832.HK 
and Oceanwide Holdings  000046.SZ  were also among the
attendees, the two sources, who have direct knowledge of the
discussions, told Reuters. 
    Vanke declined to comment. Kaisa confirmed its participation
in the meeting, without further elaboration. Central China,
Oceanwide, Shimao and Sino-Ocean Group did not respond to
request for comment.

 (Reporting by Jing Xu in Beijing and Clare Jim in Hong Kong;
Editing by Sumeet Chatterjee & Shri Navaratnam)
 ((sumeet.chatterjee@thomsonreuters.com; +852 3462 7757;))