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China Property Bonds Strong Weekly Bounce Score, by Evergrande Miss Reuters


Reuters. File photo: The China Evergrand Center building sign is seen in Hong Kong, China, September 23, 2021. REUTERS / Tyrone Siu

LONDON (Reuters) – Chinese real estate firms saw a strong weekly bounce cement on their wrecked bonds on Friday, though one notable one from the rally was missing: China Evergrand Group.

A flurry of asset sales and share placing, including some from Evergrand itself, this week raised hopes that the heavily indebted sector will be able to avoid a full-blown crisis and eventually stabilize.

Friday’s gainers included Country Garden, China’s top property developer, whose bonds were almost equal, or 100 cents to the dollar, down nearly 80 cents on a sector-wide slide last week.

Shima was also a notable rebounder. Its bonds have completed a yo-yo back up to 90 cents after dropping to around 70 last week while snatching valuable investment from S&P Global (NYSE 🙂 from the grade credit rating.

Market watchers kept the rebound down for the relief that firms have been able to raise money this week by placing shares and selling assets, even giving them deep discounts to complete their deals.

Country Garden Services Holdings, China’s top developer’s property services unit, raised $ 1 billion from share placing on Thursday, two sources told Reuters.

Among the country’s top four developers, Sunac China raised a total of $ 949.70 million, while Evergrande streaming services company HengTen struck a deal to sell its entire stake in HK $ 2.13 billion ($ 273.5 million).

Despite gains elsewhere, however, Evergrand bonds have remained between 23 and 29 cents on the dollar this week – a 71% -77% mark that returned to their value in May when problems in the Chinese property sector first began to snowball.

S&P warned this week that Evergande, the world’s most indebted developer with about $ 19 billion in international market bonds and $ 300 billion in liabilities, is still “highly likely” to default because it only has to pay $ 3.5 billion in March and April next year.

(This story corrected a spelling mistake in the first paragraph)

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