Shimao Unit Minimizes Missed Loan Payment: Evergrande Update

A unit of Shimao Group Holdings Ltd. at the center of a missed loan payment said the incident would not trigger investor demands for an accelerated repayment of its public market debt. Real estate stocks rallied on a report that policymakers will ease some funding restrictions.

The company said in a stock filing that it faced liquidity pressure and would take steps to accelerate asset sales. The company said it had not suffered any defaults in the public market.

Shares of Shimao pared their steep declines, ending the day down 5.4% to close at their lowest level since March 2009. The sponsor’s 3.76% yuan bond, due July, closed in down 18%, after a 25% intraday drop that triggered a brief halt in trading.

In a sign of limited contagion risk from Shimao’s debt woes, Chinese property stocks rallied after two days of losses, buoyed by reports that regulators have urged banks to step up lending to developers. Policymakers have also eased funding restrictions for large companies. A Bloomberg Intelligence China property gauge erased an earlier 1.3% loss to gain as much as 3.6%.

Yango Group Shares Held by Parent Company Frozen by Court (7:26 p.m. HK)

More than 17 million Yango Group Co. shares held by parent company Fujian Yango Group Co. were frozen as of Jan. 5, according to an exchange filing. The parent company has fallen victim to China’s crackdown on the country’s indebted property sector, defaulting on a dollar bond late last year after missing an interest payment.

Kaisa Group Agrees to Schedule Some Investor Reimbursement (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 it did not identify.

Chairman 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 redemption of yuan bond scheduled for Jan. 17 (4:51 p.m. HK)

Shanghai Shimao Co. said in an exchange filing that it was expected to make a principal payment of 1.9 billion yuan on January 17.

Zhenro Pays Dollar Bond Coupon (3:28 p.m. HK)

Zhenro Properties Group Ltd. made an interest payment on a dollar bond on Friday, according to a company spokesperson. The company had a $13 million coupon due 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 Home Lending (2:18 p.m. HK)

China called on banks to increase home lending in the first quarter and eased a key debt restriction for developers, a sign that authorities are growing concerned about the sector’s liquidity crunch.

In previously undeclared window guidelines issued last month, regulators asked banks to step up lending to developers after at least two quarters of consecutive declines, people familiar with the matter said. Borrowings from major real estate companies used to finance mergers and acquisitions will no longer count against the “three red lines” measures that limit debt, the people said.

Property Inventories Rebound on Easing of Measures Reported (1:08 p.m. HK)

Chinese property stocks rebounded after two days of losses after authorities reportedly eased funding restrictions for major developers. The rally was led by large public real estate companies.

Shimao Says Want To Extend ABS Maturity (11:28 HK)

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 report by REDD.

The promoter proposes to repay 10% of the principal the first month, 5% of the principal monthly from February to November and the remaining 40% in December.

Shimao Unit Minimizes Impact of Missed Loan (9:46 a.m. HK)

A Shimao Group unit said it suffered no defaults in the public markets, while its missed loan payment would not trigger accelerated repayment requests, according to an exchange filing.

The company said it was facing liquidity pressure and would take steps to accelerate asset sales.

DaFa Properties Launches Bond Exchange Offering (8:59 a.m. HK)

DaFa Properties Group Ltd. has initiated an exchange offer for at least $166 million, or 90%, of the outstanding principal amount of its 9.95% 2022 Notes, the company said in an exchange filing. The proponent said it is also seeking consent from bondholders to the proposed waivers and amendments.

The new bonds to be issued for the bond swap will mature on June 30 and will carry a coupon of 12.5%. The offer will expire 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 worth an estimated 3 billion yuan, local media The Paper reported, citing an unidentified person familiar with the deal.

Shimao Default Notice Hammers Bonds (7:30 a.m. HK)

Shimao Group Holdings Ltd., an indicator of financial contagion in China’s struggling real estate sector, suffered its biggest ever bond rout on Thursday after a creditor said one of the developer’s units defaulted on a local loan.

Shimao’s 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 on Dec. 25. 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 fund its operations, according to an exchange filing.

Shimao Investment and two other companies controlled by founder Hui Wing Mau pledged a total of 560 million shares of Shanghai Shimao, representing a 14.93% stake in the company, as of Thursday.

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