Bloomberg reported on Thursday that Shimao is seeking to defer repayment on high-yield trust products of about $947 million for three years, including $207 million due this month and $740 million maturing between April and August.
On the same day, its 4.75 percent dollar bond due on July 3 fell 2.4 cents on the dollar to 59 cents in the Hong Kong market. The price of its 6.125 percent note due in 2024 fell 2.7 cents to 40.9 cents. This week, each has lost more than 11 cents.
Zhenro’s perpetual dollar bond tumbles: Concerns that it’s not redeemable
According to Bloomberg, the Zhenro bond plummeted to as low as 23 cents on the dollar on Thursday. Zhenro Properties stock dropped 81% on Feb. 11 to its lowest level since listing in Hong Kong in January 2018.
Leonard Law, a credit analyst at Lucror Analytics, said, “Management failed to dispel last Friday’s rumors about it possibly not proceeding with an announced $200 million perpetual-bond redemption—with a ‘very generic announcement that did not clarify if it will'” do so.
Fitch Ratings on Tuesday downgraded Zhenro Properties Group Limited’s Long-Term Issuer Default Rating to “B from B+” and flagged a Rating Watch Negative. The reduction is based on Zhenro’s slow progress in addressing significant capital market maturities in 2022, as well as a material drop in contracted sales.
In its rating action commentary, Fitch said, “The capital market remains inaccessible to Zhenro, and we believe that the company may have to rely mostly on cash generation from contracted sales to repay its capital market maturities in 2022.”
Evergrande’s assets were seized at home and abroad
Reuters reported on Wednesday that a Chinese court ordered the freezing of Evergrande assets worth more than 1 billion yuan (about $158 million) for outstanding construction costs.
Among that, a municipal court in Guangzhou froze 361.5 million yuan ($57 million) Evergrande assets last week. And Guangzhou Intermediate People’s Court has also frozen 640.4 million yuan ($101 million), which was sued by State-owned Shanghai Construction last December.
Reuters cited a source familiar with the matter that said on Feb. 4 that China Evergrande has continued selling the Yuen Long rural land in Hong Kong, despite that Oaktree Capital, its creditor, had appointed a receiver. Evergrande had defaulted on a secured $520 million loan from Oaktree Capital, an asset management firm.
It is planning to use the funds from the transaction to pay Oaktree Capital. Evergrande will reclaim the remaining proceeds.
On Jan. 20, a group of creditors hired law firm Kirkland & Ellis and investment bank Moelis to discuss legal actions over concerns about their rights. Via the law company, they said Evergrande had “disregarded” them in the plan to resolve its massive debt load and warned that enforcement actions were what they would “seriously consider.”