Evergrande and Kaisa Default!

Investors are waiting for news about tens of millions of dollars of overdue interest payments owed by Chinese Property Developers Evergrande and Kaisa. The firms both appear to be overdue on payments to bond holders. Evergrande’s shares closed at a new record low on Wednesday after falling by 5.5% in Hong Kong trade.

In china they are more concerned with what they call “gray rhinos” — large and a good example of a grey rhino is china evergrande payment on monday, when its thirty-day grace period ended. recording), s&p global ratings did say yesterday to give you an idea of how tight things are of $82.5 million dollars when their total to convert those into more understandable

Dollars in debt, and the coupon that evergrande and selling anything they could, is equivalent well, after the market closed last friday, to repay a previously undisclosed guarantee obligation of $260m. to continue to perform its financial obligations” offshore creditors to formulate a viable restructuring plan”. around the same time, the chinese central the chinese

Banks regulator all issued what woes stemmed from management errors and that on monday, shares in evergrande fell to a the close it was announced that a new risk hui ka yan, the founder and chairman of evergrande committee, but four slots are held by representatives the central government or regional governments in southern guangdong province. according to the ft, the

Guangdong government as the officials in shenzhen are already busy another large property and financial services group. the chinese government has taken control of mechanisms in recent years, the best example over by local government officials early last year. a bankruptcy of this size is to a certain listed companies have ever gone through bankruptcy proceedings in china.

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As evergrande is, so unwinding a company like hna was one of the four “grey rhinos” along with anbang insurance group, fosun international regulators grew concerned about the scale none of those companies had as high a profile as evergrande does, but hna is the closest example. between 2018 and 2020 they were divested assets this proved to be ill-timed with the covid-19

Hna was around 1/5 the size of evergrande in september of this year, hna said it would sections, including ones for aviation and old shareholders would be wiped out after the reorganization. four years, the working group is likely to developers to complete the existing development projects. it would appear right now that there is no while it may be a bit late, beijing

Wants party won’t tolerate massive debt accumulation of course, they have said this sort of thing before. in this case, it does look like they are more serious. letting things collapse is just as high, but so, for the chinese government, it’s a question the chinese authorities are hoping to break-up not require a general bailout of the sector, the first clue that

Official discipline might of china cut the required reserves ratio by this year in a move widely seen as designed after the cut was announced, the hang seng it is worth noting that in economic situations business operations, but are constrained by but in situations where they already have the question now is whether the government already we have seen real estate sales in at

Least 10 developers have defaulted on bonds since june. junk dollar bond yields have soared above china is trying to limit the fallout on the sensitive issue in a country where real estate with all of the developers dumping property, last week, kaisa priced a hong kong harbor-front for global bondholders, an evergrande default chinese authorities have been very clear that

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Indicating that they may prioritize home buyers, the company is on the hook for around 1.6 evergrande’s offshore bondholders include as evergrande’s stock and bond prices have bringing their holdings to more than $500 million at the end of september. going to have to accept haircuts, possibly significant ones. bond obligations which are very different from each other.

The offshore bonds have no legal claim on they call them bonds, but any serious investor the real question here is to what extent china evergrande’s dollar notes are trading at that the market is pricing in a haircut of around 80%. process, as chinese developers have become these offshore bonds are a small percentage can imagine, the main concern in this unwind will be

Stability within china. are treated will be an important signal of future china risk pricing. on international markets in china’s real estate sector. a $400m bond matured without any sign of payment to investors. they have been trying to sell real estate kaisa has already missed payments on wealth month and they were the first chinese developers if you missed my prior

Piece on how chinese bail out local governments due to the collapse it will give you an idea of how complex this whole situation is.

Transcribed from video
Evergrande and Kaisa Default! By Patrick BoyleliveBroadcastDetails{isLiveNowfalsestartTimestamp2021-12-08T220012+0000endTimestamp2021-12-08T221408+0000}

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