(Bloomberg) -- Kaisa Group Holdings Ltd. offered to exchange at least $380 million in bonds for new notes maturing in 2023 in a bid to ease a cash crunch, while the city of Chengdu rolled out measures to support the property sector. An unidentified China Evergrande Group shareholder seeks to raise about HK$669 million ($86 million) via a share placement, according to a report. 

Junk-rated Chinese dollar bonds continued to decline Wednesday, amid lingering investor concern over a liquidity crisis in the nation’s heavily indebted property industry. Developers including Sunac China Holdings Ltd., Agile Group Holdings Ltd. and Shimao Group Holdings Ltd. saw notes drop sharply. Evergrande’s stock fell 5% in Hong Kong, bringing its loss on the year to 81%.



Key Developments:

  • China LGFV Debt Growth to Continue Slowdown in 2022: Moody’s
  • Lying Flat Can Be a Winning Investment Strategy Too: Shuli Ren
  • Kaisa’s Latest Saga Raises Red Flags for China Property Bonds
  • Digital Yuan a Game Changer to Curb China Property Speculation
  • Evergrande Stock Rally Raises Questions: What to Watch in China
  • Volatility Brings Entry Point for Asia USD Junk Bonds: T. Rowe
  • Fantasia to Make Partial Payment on Yuan Bond Coupon due Nov. 25


Evergrande Holder Plans Share Sale at 20% Discount: Ming Pao (8 a.m. HK)

A China Evergrande Group shareholder is planning to raise about HK$669 million via a share placement, Ming Pao reported, citing market talk. 

  • The placement involves 300 million existing shares, or 2.26% of Evergrande’s outstanding shares
  • Offer price of HK$2.23 per share represents a 20% discount to Wednesday’s close of HK$2.78. Identity of the shareholder remains unknown

Kaisa Applies to Resume Trading, Offers Debt Swap  (7:50 a.m. HK)

Kaisa Group has applied to resume trading Thursday and is considering accelerating the disposal of real estate projects and assets to improve liquidity, it said in a filing. Kaisa is also launching an exchange offer its $400 million in outstanding U.S dollar notes coming due on Dec. 7.

Kaisa’s 2021 bond is indicated at 50.6 cents on the dollar, Bloomberg-compiled prices show.

A set of Kaisa offshore bondholders has hired advisers as the cash-strapped Chinese developer faces mounting refinancing risks, according to people with knowledge of the situation. S&P Global Ratings said on Nov. 10 that “a default scenario is inevitable within the next six months.” 


Chengdu Rolls Out Measures to Support Developers (7:40 a.m. HK)

The city of Chengdu, capital of the southwestern province of Sichuan, has rolled out a series of measures to support local developers, according to a statement by the housing authority. Chengdu will expand credit support for developers and homebuyers and ease restrictions on developers’ use of proceeds from pre-sales. Chengdu becomes the first major Chinese city to take such a move, according to the Securities Times.

Fantasia to Modify Payment of Interest for 2023 Bonds (7:30 a.m. HK)

Fantasia said the company has made arrangement for the payment on Nov. 25 for 7.50% yuan-denominated bonds due 2023, according to a revised schedule. The firm plans to pay 20% of the interest on Nov. 25 and 80% on Nov. 25, 2022.

Chinese Estates Reduces Evergrande Stake 

Chinese Estates Holdings Ltd., a long-time supporter of China Evergrande Group, has further cut its stake in the embattled property developer. 

The Hong Kong firm, led by Chief Executive Officer Chan Hoi-wan, sold about 270 million Evergrande shares since its last disclosure on Oct. 6, lowering its stake to 2.36% as of Friday, according to a company filing late Tuesday. It revised its expected loss if it got rid of all of its holding to HK$10.6 billion ($1.4 billion) from HK$10.4 billion last month. 

Chinese Estates and Chan spent years helping Hui Ka Yan raise cash for his empire and at one point had an Evergrande stake of almost 9%. But as the developer’s woes worsened, Hui’s backers began heading for the exit and started offloading their holdings in August. Since then, the Hong Kong firm offered to go private after its shares slumped as much as 51% in about seven months. 


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