(Bloomberg) -- Hopson Development’s shares tumbled the most since 2009 after the builder -- seen as one of the safer names among China’s property companies -- said PricewaterhouseCoopers has resigned as its auditor. 

U.S. investment firm Oaktree Capital has a secured loan to ‘Venice,’ a tourism resort on the Yellow Sea Coast developed by China Evergrande Group in mainland China, the Financial Times reported, citing a letter to investors and an unidentified person close to the matter. Chinese authorities are considering a proposal to break up the embattled developer by selling the bulk of its assets, people familiar with the matter said. 

Hopson’s shares sank as much as 31.5% in Hong Kong, and its dollar bonds are poised for record declines. A Bloomberg Intelligence index of real-estate stocks fell 0.6%. 

 

Key Developments:

  • China Is Said to Weigh Breaking Up Evergrande to Contain Crisis
  • A Dismantling of Evergrande Could Be Positive: Credit React
  • Oaktree Secures Loan to China Tourism Resort Over Evergrande: FT
  • Hopson Development Says PwC Agreed to Resign as Auditor
  • Sino-Ocean Sells Additional $200m 2.70% Green Notes Due 2025
  • State-Owned Cos. Bid for Kaisa Shenzhen Property Projects: Yicai
  • China’s Corporate Bond Default Rate Set to Rise in 2022: Fitch
  • Housing Crackdown Weighs Down China’s Economy as the Year Starts

 

Hopson Dollar Bonds Set for Record Drop after Auditor Resigns (9:15 a.m. HK)

Hopson Development dollar bonds are poised for record declines, after the firm said late Thursday PricewaterhouseCoopers has agreed to resign as the company’s auditor.  Its shares fell as much as 31.5% to the lowest since August 2020.

The developer’s 7% note due 2024 fell 14.9 cents to 77.1 cents, according to Bloomberg-compiled prices as of 9:06am in Hong Kong. The 6.8% note due 2023 dropped 13.8 cents to 78.5 cents.

Oaktree Has Secured Loan to Evergrande China Resort: FT (8:05 a.m. HK)

Oaktree Capital has a secured loan to ‘Venice,’ a tourism resort on the Yellow Sea Coast developed by Evergrande in mainland China, the Financial Times reports, citing a letter to investors and an unidentified person close to the matter. Oaktree Capital’s loan allows it to take control of the land in case there’s a default of Evergrande, according to the report.

The asset management firm has also moved to seize a plot in Hong Kong after Evergrande defaulted on a loan against which Oaktree had security, the FT previously reported, citing people familiar with the matter. 

Country Garden Repaid Notes Due Jan. 27 (7:41 a.m. HK)

Country Garden Holdings Co. has repaid the outstanding senior notes in full with accrued interest, the Chinese developer said in an exchange filing. The notes will be canceled and delisted from Singapore Exchange Securities Trading.

China’s Corporate Bond Default Rate to Rise: Fitch (7:32 a.m. HK)

China’s corporate bond default rate is set to increase this year due to nonpayments at privately-owned property developers, according to a Fitch Ratings report published Thursday.

Defaults on capital market debt from the state sector including local government financing vehicles are likely to remain at a similar or slightly higher level than last year, Fitch said.

State-Owned Cos. Bid for Kaisa Projects: Yicai (6:22 a.m. NY)

Some state-owned enterprises bid for Kaisa Group’s property projects in Shenzhen, China Business News reports, citing unidentified people. 

The deal may be completed after the Chinese New Year holiday, according to the report, which didn’t give a timetable or name any buyers.

S&P Signals Logan’s Rating May Be Cut (6:22 p.m. HK)

S&P indicated it may be ready to lower Logan Group’s credit rating, citing “previously unreported debt guarantees.”

The rating company placed its ‘BB’ long-term issuer credit rating on Logan and ‘BB-’ long-term issue rating on its outstanding senior unsecured notes on CreditWatch with negative implications, according to a statement. 

“If the previously unreported debt is confirmed, Logan’s credit profile and liquidity may be hit,” S&P said, adding more information is required to analyze the extent of such debt.

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