(Bloomberg) – A unit of Shimao Group Holdings Ltd. at the center of a failed loan Payment said the incident will not trigger investor demands for accelerated debt repayment in the public markets. Real estate stocks rallied following a report that policymakers will ease some funding restrictions.
The company said in a stock exchange filing that it was facing liquidity pressure and would take steps to speed up asset sales. The company said it has not experienced any public market defaults.
Shimao shares posted sharp declines, ending the day 5.4% lower to close at its lowest level since March 2009. The developer’s 3.76% yuan bond due July closed lower by 18%, after a 25% drop during the day which triggered a brief halt in trading.
In a sign of limited contagion risk from Shimao’s debt problems, Chinese real estate stocks rallied after two days of losses, supported by reports that regulators urged banks to step up developer lending. Policymakers have also eased funding restrictions for large companies. A Bloomberg Intelligence China real estate gauge erased an earlier loss of 1.3% to gain as much as 3.6%.
Yango Group shares held by relative frozen by court (7:26 p.m. HK)
More than 17 million shares of Yango Group Co. held by parent company Fujian Yango Group Co. were frozen as of Jan. 5, according to an exchange document. The parent company has become a victim of the Chinese crackdown on the country’s indebted real estate sector, defaulting on a dollar bond late last year after missing an interest payment.
Kaisa group agrees to plan to reimburse certain investors (7:09 p.m. HK)
Kaisa Group Holdings Ltd. is working on a plan to reimburse investors in wealth management products, Reuters reported, citing two people familiar with the matter whom they did not identify.
President Kwok Ying Shing has accepted a request from the Shenzhen government to provide a proposal to reimburse investors in its wealth management products by the end of January, one of the people told Reuters. If Kaisa fails to come up with a plan, the Shenzhen government could seize some of its assets and slowly take over the business.
Shanghai Shimao Announces Repayment of Yuan Bond Set for Jan. 17 (4:51 p.m. HK)
Shanghai Shimao Co. said in an exchange document that it plans to make a principal payment of 1.9 billion yuan on January 17.
Zhenro pays bond coupon in dollars (3:28 p.m. HK)
Zhenro Properties Group Ltd. made an interest payment on a dollar bond due Friday, according to a company spokesperson. The company had a $ 13 million coupon owed on a 2026 note, according to data compiled by Bloomberg.
It has $ 1.39 billion in other bond maturities and coupon payments due this year.
China Urges Banks To Increase Mortgage Lending (2:18 p.m. HK)
China called on banks to boost mortgage lending in the first quarter and easing a key debt restriction for developers, a sign that authorities are increasingly concerned about the sector’s liquidity crisis.
In groundbreaking window guidelines released last month, regulators called on banks to step up developer lending after at least two consecutive quarters of declines, people familiar with the matter said. Borrowings from large real estate companies used to fund mergers and acquisitions will no longer count against “three red lines” measures that limit debt, the people said.
Real estate shares rebound on easing of reported measures (1:08 p.m. HK)
Chinese real estate stocks rebounded after two days of losses, after authorities reportedly eased funding restrictions on major developers. The rally was led by large state-owned real estate companies.
Shimao requested ABS maturity extension (11:28 HK)
The Shimao Group is seeking to extend the maturity of three asset-backed securities totaling 1.4 billion yuan ($ 220 million) due this month, according to a REDD report.
The developer offers to repay 10% of the principal in the first month, 5% of the principal monthly from February to November, and the remaining 40% of the principal in December.
Shimao Unit Minimizes Impact of Defaulted Loan (9:46 a.m. HK)
A unit of the Shimao group said it does not have has not suffered any defaults in the public markets, while its defaulted loan payment will not trigger expedited repayment requests, according to an exchange record.
The company said it faces cash pressure and will take steps to speed up asset sales.
DaFa Properties Launches Exchange Bond Offering (8:59 a.m. HK)
DaFa Properties Group Ltd. has launched an exchange offer for at least $ 166 million, or 90% of the outstanding principal amount of its 2022 9.95% notes, the company said in an exchange filing. The developer said it is also seeking consent from bondholders to the proposed waivers and changes.
The new notes to be issued for the bond swap will mature on June 30 and carry a coupon of 12.5%. Offer expires at 4 p.m. London time on January 12.
Aoyuan in talks to sell offshore projects (8:45 a.m. HK)
China Aoyuan Group Ltd. is in talks to sell four to five offshore projects valued at around 3 billion yuan, local outlet The Paper reported, citing an unidentified person close to the deal.
Shimao Default Notice Hammers Bonds (7:30 a.m. HK)
Shimao Group Holdings Ltd., a barometer of financial contagion in China’s troubled real estate sector, suffered Its biggest bond rout on Thursday after a creditor said one of the developer’s units had defaulted on a local loan.
The Shimao unit failed to pay 645 million yuan out of a total of 792 million yuan due as of Dec. 25, according to a notice sent to investors by China Credit Trust Co. The trust company had demanded early repayment by the 25th. December after the developer failed to meet installment requirements, according to the notice.
Shimao pledges unit shares for loans (7:25 a.m. HK)
Shanghai Shimao Investment Management on Wednesday pledged 265 million shares, or a 7.06% stake in Shanghai Shimao Co. with Ningbo Commerce Bank Co. to finance its operations, according to an exchange document.
Shimao Investment and two other companies controlled by founder Hui Wing Mau pledged 560 million combined shares of Shanghai Shimao, representing a 14.93% stake in the company, on Thursday.