Chinese property bonds firm after Kaisa and Sunac make coupon payments

Modern Land (China)

19/10/2021 04:35

HONG KONG, Oct 19 (Reuters) - Chinese property bonds
remained firm on Tuesday after two major developers made coupon
payments, though the market remained focused on the potential
for default by China Evergrande Group  3333.HK  this week.
    The bond market has responded positively to comments from
China's central bank on Friday and Sunday saying that spillover
effects from Evergrande's debt problems on the banking system
were controllable and that China's economy was "doing well".
    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 did not immediately
respond to request for 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
    The liquidity crisis at Evergrande, China's No. 2 developer,
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.
    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; Editing by Edwina Gibbs)
 ((clare.jim@thomsonreuters.com; +852 2912 6653; Reuters
Messaging: clare.jim.thomsonreuters.com@reuters.net))