Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

China Evergrande plans to repay $1.5 billion bond due June 28 this week - source

Stock Markets Jun 21, 2021 05:31AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Clare Jim

HONG KONG (Reuters) -China's most indebted property developer Evergrande Group plans to repay its $1.47 billion offshore bond maturing next Monday this week, ahead of schedule, a source close to Evergrande said.

In recent weeks some of the bonds of Evergrande and its subsidiaries have sold off on rising investor concerns over the developer's ability to make timely payments. This pushed the yields on two separate 5.8% 2025 onshore bonds to above 29.5% from around 11.5% earlier in June, according to Refinitiv.

Evergrande declined to comment whether it would repay the bond early, but it said it had sufficient funds to repay the bond due next Monday.

Shares of the Hong Kong-listed developer, which have been under pressure in the past few weeks, extended gains to as much as 10% on Monday to an almost one-week high after the Reuters report. The stock closed 9% up at HK$10.80.

Earlier this month, Evergrande said it was arranging payment for some of its project companies' commercial paper that had not been repaid on time.

Evergrande and its subsidiaries have outstanding bonds worth $28.1 billion, according to Refinitiv data, including the bond due on June 28.

SCRAMBLING FOR CASH

Earlier in the day, smaller peer Calxon said in a filing that controlling shareholder Evergrande will sell more than half of its stake worth $386 million, in a move that will enhance Evergrande's cashflow.

DSB analyst Danielle Wang said investors were worried Evergrande would not have cash available offshore to repay the bond, as the developer had not issued dollar bonds for a while, so an early bond repayment would help boost its share and bond prices.

She added that if the yields on other Evegrande bonds drop to normal levels after this repayment, it would enable the company to issue new dollar bonds and pay back the more expensive onshore bonds, helping its cashflow.

In a research note earlier this month, DBS said risks remain in Evergrande's 214 billion yuan ($33 billion) short-term bank loans maturing or repricing in the second half of this year, as banks are under regulatory pressure to trim exposure to the real estate sector.

The developer has been scrambling for cash to meet the new regulatory requirements on debt ratios, including raising funds with its various units and selling some of its residential units at steep discounts.

Company chairman Hui Ka Yan said early this month the company's debt will drop to below 600 billion yuan by the end of June, near its year-end target of 560 billion yuan, and achieving one of the three debt ratio caps set by regulators.

($1 = 6.4679 Chinese yuan renminbi)

China Evergrande plans to repay $1.5 billion bond due June 28 this week - source
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email