China Evergrande makes onshore coupon payment - sources (updated)

Modern Land (China)

19/10/2021 08:26

(Adds Evergrande's onshore coupon payment, other details)
    By Clare Jim and Samuel Shen
    HONG KONG/SHANGHAI, Oct 19 (Reuters) - China Evergrande
Group  3333.HK  has paid an onshore bond coupon due on Tuesday,
four people with knowledge of the matter said, amid concerns
about a possible offshore default by the cash-strapped developer
later this week.
    Hengda Real Estate Group Co, Evergrande's flagship unit, has
remitted funds to pay an onshore bond coupon of 121.8 million
yuan ($19 million), the people said.
    One of the people said Evergrande, China's No. 2 developer, 
needs to prioritises its limited funds towards domestic market
where the stakes are much higher for the country's financial
system.
    The liquidity crisis at Evergrande, which has $300 billion
in debt and has missed a series in bond payments, has roiled
global markets. High-yield bonds issued by Chinese property
developers have been especially hammered.
    An Evergrande bond due March 23, 2022 will officially be in
default if the company does not make good after a 30-day grace
period for a missed coupon payment that had been due on Sept.
23.
    But the offshore bond market has responded positively after
China central bank's assuring comment and coupon payments of two
major developers.
    An index of China high-yield debt  .MERACYC , which is
dominated by property developer issuers, has seen spreads
tighten from last week's record levels to around 1,484 points on
Tuesday.
    Sunac China  1918.HK , which has a $27.14 million payment
due Tuesday, has paid its bondholders, a source with direct
knowledge of the matter said. 
    The source was not authorised to speak to media and declined
to be identified. A Sunac representative declined to comment.
    Kaisa Group  1638.HK  said on Monday it has paid a coupon
due Oct. 16 and it plans to transfer funds for a coupon worth
$35.85 million due Oct. 22 on Thursday.  urn:newsml:reuters.com:*:nL4N2RE1KL
    In the past few days, the People's Bank of China has said
spillover effects on the banking system from Evergrande's debt
problems were controllable and that China's economy was "doing
well".
    Bonds from Chinese developers that gained on Tuesday
included Modern Land's 2022 bonds  BS211067586=  which bounced
over 8% to 40.250 cents on the dollar, while Central China Real
Estate's 2024 bonds  VG226203036=  climbed over 5% to 44.843
cents.
    On Monday, smaller developer Sinic Holdings  2103.HK 
defaulted on $246 million in bonds as expected. It had warned of
the default last week, saying it did not have sufficient 
financial resources.  urn:newsml:reuters.com:*:nL1N2R70S9

 (Reporting by Clare Jim in Hong Kong, Samuel Shen in Shanghai,
Shanghai newsroom and Beijing newsroom; Editing by Edwina Gibbs
and Lincoln Feast)
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters
Messaging: clare.jim.thomsonreuters.com@reuters.net))