X

This is not a paywall.

Register for free to continue reading.

We made a promise to you that we’ll never erect a paywall and we intend to keep that promise. We also want to continually improve your reading experience and you can help us do that by registering with us. It’s quick, easy and will cost you nothing.



Nearly there! Create a password to finish up registering with us:


Please enter your password or get a login link if you’ve forgotten


Open Sesame! Thanks for registering.

First Thing, Daily Maverick's flagship newsletter

Join the 230 000 South Africans who read First Thing newsletter.

We'd like our readers to start paying for Daily Maverick

More specifically, we'd like those who can afford to pay to start paying. What it comes down to is whether or not you value Daily Maverick. Think of us in terms of your daily cappuccino from your favourite coffee shop. It costs around R35. That’s R1,050 per month on frothy milk. Don’t get us wrong, we’re almost exclusively fuelled by coffee. BUT maybe R200 of that R1,050 could go to the journalism that’s fighting for the country?

We don’t dictate how much we’d like our readers to contribute. After all, how much you value our work is subjective (and frankly, every amount helps). At R200, you get it back in Uber Eats and ride vouchers every month, but that’s just a suggestion. A little less than a week’s worth of cappuccinos.

We can't survive on hope and our own determination. Our country is going to be considerably worse off if we don’t have a strong, sustainable news media. If you’re rejigging your budgets, and it comes to choosing between frothy milk and Daily Maverick, we hope you might reconsider that cappuccino.

We need your help. And we’re not ashamed to ask for it.

Our mission is to Defend Truth. Join Maverick Insider.

Support Daily Maverick→
Payment options

Evergrande suffers first rejection on local bond extens...

Business Maverick

Business Maverick

Evergrande suffers first rejection on local bond extension

Signage at the China Evergrande Centre in Hong Kong, China, on 21 March 2022. The embattled Chinese property developer along with its other units suspended trading in Hong Kong on Monday morning, according to exchange filings. (Photo: Chan Long Hei/Bloomberg)
By Bloomberg
11 Jul 2022 0

A credit crunch at the Chinese property giant roiled markets last year as authorities embarked on a sweeping clampdown of the nation’s debt-saddled property sector. If Evergrande fails to repay the local bond, it could mark the developer’s first official delinquency on a domestic note, after it defaulted on dollar-bond payments in December.

The China Evergrande Group suffered its first rejection from local creditors to extend a bond payment deadline, in a development that marks growing impatience with the distressed builder at the centre of the nation’s property debt crisis.   

Holders of a puttable yuan-denominated bond from the firm’s main onshore unit Hengda Real Estate Group rejected a plan to further extend payment past a July 8 deadline by six months, according to a Shenzhen stock exchange filing Monday. The company had held a meeting last week to seek creditor approval, but more than 90% of the voting holders rejected the proposed extension. 

A credit crunch at the Chinese property giant roiled markets last year as authorities embarked on a sweeping clampdown of the nation’s debt-saddled property sector. If Evergrande fails to repay the local bond, it could mark the developer’s first official delinquency on a domestic note, after it defaulted on dollar-bond payments in December. 

“This is the first time it failed to extend an onshore bond and will constitute a default,” said Li Kai, CIO at Beijing Shengao Private Equity Fund Management Co Ltd. “It will create a new path for restructuring and will have implications in pricing of real estate bonds, especially extended bonds. We expect more onshore defaults from here.”

The local note in question is a 4.5 billion yuan (R11,12-billion) security due in 2023 with a put option for investors to seek early repayment. The security doesn’t have a grace period, according to its offering circular. The developer had in January avoided what would have been its first default on a public onshore bond by obtaining investor backing to delay early repayment on the note for six months. 

Evergrande has so far avoided missing payments on its local bonds by securing delays on its deadlines.

The unit had said last week that it was seeking the further delay to Jan. 8 next year, when the bond is set to mature. 

Both onshore and offshore investors are closely watching what could be one of the nation’s biggest debt restructurings, as they prepare for a lengthy battle over who gets paid from what remains. Evergrande has more than $300 billion in liabilities.

What’s next for China Evergrande, crushed by debt?: QuickTake

Evergrande had previously said it aims to provide creditors with a preliminary overhaul proposal by the end of July. The real estate giant said last month that it was actively pushing forward with the restructuring work. On the onshore bond, Hengda said that it’ll actively negotiate with bondholders to reach a plan. BM

 

Gallery

Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

No Comments, yet

Please peer review 3 community comments before your comment can be posted