More Chinese real estate companies try to extend the terms of their bonds to avoid defaults

Many cash-strapped Chinese property developers are trying to negotiate new terms with their bondholders to avoid potential defaults, with the Shimao Group and Yuzhou Group the latest to seek extensions to their debt maturities.

The market is also watching the outcome of China Evergrande Group’s meeting with its bondholders in mainland China, as the voting period to approve an extension will end on Thursday. So far, the company has made payments on those bonds, although it has defaulted on some foreign bonds.

With more than $300 billion in liabilities, the world’s most indebted real estate company is seeking a six-month extension for the amortization and coupon payment of a 4.5 billion yuan ($157 million) bond.

Chinese property developers are facing an unprecedented liquidity crisis due to years of regulatory restrictions on borrowing, which has led to a series of overseas debt defaults, credit rating downgrades and sales of developers’ stocks and bonds. .

A World Bank economic outlook report said earlier this week that a severe and prolonged downturn in China’s real estate sector would have significant repercussions throughout the economy, as the combined liabilities of its developers at home and abroad amount to almost 30% of the gross domestic product (GDP) of the country.

The World Bank warned of the risks and possible contagion costs of a strong deleveraging of large Chinese real estate companies.

Shanghai-based real estate company Shimao will hold online meetings with creditors of two asset-backed securities (ABS) on Jan. 17 to vote on payment extension proposals, according to documents obtained by the company. Reuters on Thursday. Those two ABS products in mainland China, worth a total of 1.17 billion yuan ($183.91 million), are due at the end of this month, and Shimao is seeking to extend the payment terms until the end of 2022, by while making some staged payments before the new deadline, according to documents and source confirmation.

Yuzhou, founded in the eastern coastal city of Xiamen, has also announced an exchange offer for two of its 2022 dollar bonds due later this month (for a total value of $582 million) to extend maturities in one year to avoid default.

Coupon payments totaling $110 million due in January and February are expected to be delayed, Yuzhou said in a filing. He is also seeking consent from the holders of all his other $4.5 billion bonds to modify terms that would help him avoid cross-defaults if other bondholders request redemption.


Related articles

ANSES pays the Unemployment Benefit: who receives today, Friday, May 24, 2024

The National Social Security Administration (ANSES) begins the payments corresponding to the Month of May for unemployment insurance holders. Today, Friday the 24th,...

The US asked for the Bases law and the lifting of the exchange rate

While the debate continues over Base Law In the Senate, the Charge d'Affaires of the United States Embassy in Buenos Aires, Abigail Dressel, highlighted...

Not only did it go to Benedetto, Diego Martínez would also have deleted another...

The atmosphere has become a little tense Boca Juniors after the statements expressed by Dario Benedettowho last Friday would have responded to Diego Martinez...