Since 2022, the sentiment in the Chinese real estate sector remained negative. More non-state-owned real estate developers have fallen into liquidity crises, leading to defaults on their bonds or the need to offer an extension proposal for bondholders.
At the moment, the default rate (actual default plus technical default) of Chinese real estate USD bonds has risen to over 70%. Under this unprecedented situation, most Chinese real estate bond investors should be worried and frightened.
It is worth emphasizing that even if bonds have defaulted, bondholders are not left with nothing. In general, there are two kinds of scenarios following bond defaults: a debt restructuring or a liquidation filed by creditors.
In the past, there were many cases where companies successfully paid off the interests and a large portion of the bond principal after undergoing a debt restructuring. Also, given the current low bond prices of some developers, there are some opportunities for their bonds to rebound.
Nonetheless, investors should understand that debt restructuring or liquidation usually takes a long time (at least one year or more). It is no guarantee that the company’s internal assets can be sold at a reasonable price or market value. Besides, a game theory from different parties applies and will result in high uncertainty in the final recovery value of the defaulted bonds. In addition, the bonds' liquidity can be low and volatility can be high. Investors have to pay attention to these points before investing.
Below, we have compiled a list of the latest developments and bond prices for 30 mainstream non-state-owned real estate developers, as well as our team’s latest commentaries. This table will be updated continuously for investors’ reference (recommend to read via web version) (bold content as the latest update):
Table 1: List of 30 Chinese Real Estate Developers (Categorized by Sales Size)
(Large Chinese Real Estate Developers)
| Company (Blue Font is the Latest Update, if any) | Latest Development | Related Bonds | Ask Price (Investors Buy) | Commentary |
| Evergrande | - The China Securities Regulatory Commission fined Hengda Real Estate RMB 4.175 billion for involving in bond issuance fraud, compilation of false financial reports and failure to disclose material information. - Evergrande ordered to be liquidated by HK Court as the Group failed to push forward a restructuring proposal. - Evergrande Property Services sued China Evergrande over the RMB 2 billion deposit certificate pledge guarantees seized by banks. | EVERRE 7.500% 28JUN2023 CORP (USD) | 1.7 | - Evergrande has officially entered a forced liquidation, and Alvarez & Marsal will be the liquidator to handle the asset disposal. In other words, unless Evergrande appeals for the case or the liquidator reinitiates the debt restructuring, otherwise there will no longer be any restructuring plan. - Instead of the sales condition, we believe that the inability to issue new bonds is the key reason for the collapse of this restructuring plan. It shows that the relationship between the Group and the government is quite bad at this moment. |
| Scenery Journey | TIANHL 13.000% 06Nov2022 Corp (USD) | 1.5 | ||
| Country Garden | - Country Garden's attributable contracted sales in April 2024 was approximately RMB 3.9 billion, decreased by 83% YoY. The rental income in the same month were RMB 2.3 million, increased by 14% YoY. - Country Garden received a petition for winding up filed by Ever Credit in the High Court of Hong Kong, involving an HKD 1.6b loan and interests. The first hearing of the petition is scheduled for 17th May. - Country Garden has notified some of its offshore creditors regarding its plan to propose a preliminary debt restructuring plan to special creditors group as early as June. They will announce the proposal to the wider group of creditors in the third quarter. - Country Garden has 272 projects included in the whitelist in total and received more than RMB 1.7 billion refinancing support. - Country Garden’s independent non-executive Directors, Mr. Lai Ming, Mr. Shek Lai Him and Mr. Tong Wui Tung have resigned from their positions due to their intention to devote more time to their other commitments. Dr. Han Qinchun, Mr. Wang Zhijian and Mr. Tuo Tuo have been appointed as the new independent non-executive Directors. | COGARD 8.000% 27JAN2024 Corp (USD) | 7.5 | - Country Garden already entered the stage of offshore debt defaults, but it is still actively disposing its assets to repay its onshore bonds. Its liquidity might be better than the defaulted peers. - As the company still maintains normal operating conditions in the onshore market. Along with no intention of the major shareholder and management to giving up the company, we believe that it will launch a offshore debt restructuring plan as soon as possible. It is unlikely to enter into compulsory liquidation. |
| COGARD 6.500% 08APR2024 CORP (USD) | 7.5 | |||
| Sunac | - Sunac’s total contracted sales in April 2024 was approximately RMB 12.5 billion, increased by 55% YoY. - On 20 November, Sunac's s offshore debt restructuring plan was approved and became effective, corresponding bonds have been issued. - The final distribution ratio for convertible bonds, mandatory convertible bonds, shares of Sunac Services and the new bonds are 9.78%, 26.88%, 7.58% and 55.76% respectively. Because the amount opted for the mandatory convertible bonds and shares of Sunac Services exceeded the maximum limit by 45% and 73%, the instruments will be allocated to creditors on a pro-rated basis. The remaining amount will be allocated to the new bonds. - On 6 December, the First Conversion of the Mandatory Convertible Bonds are completed. Around USD 1.9 billion principal amount opted for a conversion, representing 69.2% of the bond issue size. Since Sunac has raised the maximum conversion amount from 25% to 100%, a total of 2.475 billion shares have been issued and allotted, representing approximately 29.5% of total shares upon the completion of conversion. - According to reports, Sunac has more than 90 development projects included in the first batch of the 'whitelist' so far. - Sunac rolled over principal payments on four bonds to December. | SUNAC 7.950% 08AUG2022 CORP (USD) | 15.6 | - The First Conversion of Sunac's Mandatory Conversion Bonds has successfully eliminated close to 20% of its offshore debts. It will definitely pave the way for the Group's future debt repayments. - Compared to Evergrande, Sunac's restructuring plan goes through quickly is a display of better execution power and debt structure. |
| SUNAC 8.350% 19APR2023 CORP (USD) | 11.4 | |||
| Shimao | - Shimao’s total contracted sales in April 2024 was approximately RMB 2.6 billion, decreased by 48% YoY. - Shimao announced an offshore debt restructuring plan, providing four options, including a fixed combination of Option 4 or free allocation of Option 1 to Option 3. Option 1 is Short-term Loan / Bond, with a tenor of four to six years and 50% principal haircut. Option 2 is Long-term Loan / Bond, with a tenor of seven to nine years and no haircut. Option 3 is Mandatory Convertible Bond, with conversion price of HKD 8.5 into Shimao Group shares. | SHIMAO 4.750% 03JUL2022 CORP (USD) | 5.0 | - The restructuring plan is fair. Considering the low Shimao’s bond price, accepting the plan should have a higher recovery value compared to selling the bond at the market. - Although there is around a 50% principal haircut in Option 1, since the priority of repayment is higher than that of the long-term bond/loan under Option 2, Option 1 has certain merits. - Option 2 does not have principal haircuts, which is suitable for creditors who are not willing to accept the principal haircuts. - Option 3’s conversion price is high. Creditors who choose Option 3 have to accept a large portion of indirect principal haircuts. This option is less attractive. |
| SHIMAO 3.975% 16SEP2023 CORP (USD) | 5.0 | |||
| Longfor | - Longfor's total contracted sales in April 2024 was approximately RMB 8.9 billion, decreased by 46% YoY. The Group's recurring income was around RMB 2.17 billion, including the operating income of around RMB 1.1 billion and the service income of around RMB 1.07 billion. The Group acquired four new land plots, with the cost of acquisition on attributable basis amounting to RMB 4.44 billion. - Moody's downgraded the Group from Ba1 to Ba2, with a negative outlook, mainly due to the weakening credit metrics and liquidity buffers and be more reliable on secured financing. | LNGFOR 3.375% 13Apr2027 Corp (USD) | 78.5 | - Longfor's adjusted cash to short-term debt is 1.36 times. It keeps purchasing land since year to date, reflecting its liquidity is stronger than the peers. - As the industry outlook is still unclear, with a poor sales figure, its longer-term bonds are still subject to higher credit risks. |
| LNGFOR 3.950% 16Sep2029 Corp (USD) | 69.5 | |||
| Seazen | - Seazen's total contracted sales in April 2024 was approximately RMB 3.7 billion, decreased by 48% YoY. The rental income and management fees in the same month were RMB 960 million, increased by 25% YoY. - In 2024 Q1, Seazen Holdings's total revenues were around RMB 14.4 billion, decreased by 12% YoY. The profit to shareholders was RMB 230 million, significantly decreased by 66%. - As of end-2023, Seazen Group's non-restricted cash to short-term debt was 0.53 times, with a net gearing ratio of 48%. | FUTLAN 4.450% 13Jul2025 Corp (USD) | 69.0 | - The recent relaxation on the commercial real estate loan uses could boost the company's short-term liquidity. However, with a poor sales figure in the industry and unsatisfactory cash to short-term debt ratio, the Group's medium- to long-term bonds are still subject to higher credit risks. |
| FTLNHD 4.800% 15Dec2024 Corp (USD) | 81.5 | |||
| CIFI | - CIFI's total contracted sales in April 2024 was approximately RMB 4.0 billion, decreased by 52% YoY. - CIFI has reached an agreement in principle with the AHG on the key terms of a holistic proposal. The company seeks to deleverage approximately US$3.3 billion to US$4 billion, with minimum 85% haircut for cash option, and 68-80% haircut for new notes and new loans option, and Nil haircut for longer-tenor new notes and new loans. - Lin Feng, an Executive Director and the CEO of CIFI, has reigned due to health reasons. Ge Ming was appointed as a new Executive Director and Ru Hailin was appointed as the new CEO. - CIFI has confirmed to have 68 projects approved on the “whitelist”. They were granted RMB 150 million which will be disbursed according to the progress of their project construction. - CIFI has announced six debt reduction options, with a target of reducing debt by up to USD 4 billion. This has been agreed with by bondholder holding approximately 43% of the total amount of bond. | CIFIHG 5.500% 23JAN2023 CORP (USD) | 10.5 | -The proposal on offshore debt restructuring is expected to be announced soon. |
| CIFIHG 6.450% 07NOV2024 CORP (USD) | 10.5 | |||
| Zhongliang | - Zhongliang's total contracted sales in April 2024 was approximately RMB 1.4 billion, decreased by 59% YoY. - Zhongliang announced the proposed restructuring plan for its offshore debts. Existing bondholders will receive an upfront payment of 1% of the outstanding principal, and a combination of New Bonds and New Convertible Bonds with an amount equal to 99% of outstanding principal (plus accrued interest), which the creditors can make their own allocation on these two instruments. - On 16 July, the Group said the major creditors holding about 38.5% of the outstanding principal of the bonds have participated in the restructuring support agreement, and it is now formally inviting other creditors to participate. The deadline for consent fee is 11 August 2023. - Zhongliang’s offshore debt restructuring plan received support from 99% of its creditors and approval from the Hong Kong court. It involves approximately USD 1.2 billion in offshore debt principal. - Zhongliang announced that the winding-up petition against the company has been dismissed by the High Court. - Zhongliang announced the successful completion of its debt restructuring plan with an effective date of 20th March, 2024. On that day, the company issued a total of USD 1.4 billion of senior notes and convertible bonds to the creditors of the plan as part of the consideration for the plan. | ZHLGHD 8.750% 15Apr2023 Corp (USD) | 9.2 | - We think the restructuring plan proposed by Zhongliang is very sincere, given that both the tenor and simplicity are much better than the plans published by other developers. It also does not feature any form of alternate haircut such as a mandatory debt-to-equity conversion. - Considering the principal amount held by the major creditors who have participated in the agreement, as well as the decent terms offered by the plan, we believe it is likely that Zhongliang can achieve more than 75% participation rate in the restructuring support agreement. - However, we still believe that the Group's repayment ability will only improve if the sales can be restored to about RMB 10 billion level per month. |
| Zhenro | - Zhenro's total contracted sales in April 2024 was approximately RMB 0.6 billion, decreased by 64% YoY. - Zhenro withdrew the previous debt restructuring plan. - Zhenro announced that it will seek court permission to cancel the hearing scheduled for 2nd May due to the need for more time to consider an appropriate solution to its offshore debt. | ZHPRHK 7.350% 05Feb2025 Corp (USD) | 1.8 | - Zhenro withdrew the old restructuring plan and intends to propose a new restructuring plan. We believe that it is because the industry has not recovered as expected. It is hard for the company to comply with its debt restructuring plan which does not incur a principal haircut. - We estimate that its new restructuring plan will be of poor quality. It is more likely to involve a high proportion of principal haircut. |
| ZHPRHK 9.150% 06MAY2023 CORP (USD) | 1.9 | |||
| Logan | - Logan announced debt restructuring plan, and as of 26 March, holders representing over 77.8% of the aggregate outstanding principal amount of the Existing Notes have already acceded to the CSA. - Logan announced that the Grand Court of the Cayman Islands and the Hong Kong High Court have dismissed their winding-up petitions against the company respectively. - Logan announced over 78% of bondholders have signed credit support agreements. | LOGPH 7.500% 25AUG2022 CORP (USD) | 9.5 | -The offshore projects are expected to be used for credit enhancement, offering some protection for offshore bondholders - We think that the sincerity of the restructuring proposal of Logan is acceptable , and the principal haircut is smaller than other proposals. Investors can choose the option that suits their needs. |
| Greentown | - Greentown's total contracted sales in April 2024 was approximately RMB 1.5 billion, decreased by 26% YoY. - A subsidiary of Greentown China has repurchased onshore bonds and asset-backed securities, with a total amount of RMB 609 million. - On Aug 15, Greentown China acquired 50% stake in Suzhou Jinyu, 51% stake in Suzhou Zhuoyu and 50% stake in Hangzhou Zhiyan from KWG. The respective consideration for these acquisitions were RMB 517 million, RMB 378 million and RMB 1,117 million, with a total consideration of RMB 2,072 million. | GRNCH 4.700% 29Apr2025 Corp (USD) | 95.2 | -The company's current operating condition is quite stable, and the SOE background may help the company to obtain financing, and the risk of debt repayment is expected to be relatively low. |
| GRNCH 5.650% 13Jul2025 Corp (USD) | 94.7 |
(Mid-sized Chinese Real Estate Developers)
| Company | Latest Development | Related Bonds | Ask Price (Investors Buy) | Commentary |
| Agile | - On 18 May, the company has not made payment in relation to the interest on the 2025 Notes and expects that it will not be able to fulfil all payment obligations under its offshore debts, triggering default. - Agile's total contracted sales in April 2024 was approximately RMB 1.2 billion, decreased by 68% YoY. - On 8th February, Agile announced the sale of a 40% equity stake in a Jiangsu development project including the associated loan, for a total consideration of approximately RMB 0.3 billion. | AGILE 5.500% 21APR2025 Corp (USD) | 7.0 | - The company will likely engage external financial adviser and legal adviser to assist the the company in debt restructuring. - The Group had a strong willingness to repay its debts in the past, such as selling its core assets several times for liquidity and actively looking for different financing channels to raise funds. |
| AGILE 5.750% 02JAN2025 CORP (USD) | 8.0 | |||
| KWG | - KWG's total contracted sales in April 2024 was approximately RMB 1 billion, decreased by 70% YoY. - KWG’s wholly-owned subsidiary sold the remaining 50% equity interest in Ningbo Meishan’s equity interest to Midea Real Estate to repay a 400 million debt. | KWGPRO 6.000% 14JAN2024 Corp (USD) | 7.0 | The company appointed Alvarez & Marsal as its financial advisor to restructure its offshore debt. Due to the intervention of CK Asset Holdings in the Hong Kong project jointly developed by Logan, it is difficult to make progress in restructuring in the short term. |
| KWGPRO 7.400% 05MAR2024 CORP (USD) | 7.0 | |||
| Ronshine | - Ronshine's total contracted sales in February 2024 was approximately RMB 0.5 billion, decreased by 74% YoY. - The company failed to pay two interest payments on USD bonds and one USD bond principal due in 25 October, which constituted a default. | RONXIN 8.750% 25OCT2022 CORP (USD) | 4.0 | - Ronshine's willingness to repay is quite high, given that the company has repaid a few onshore and offshore debts this year. - However, the company eventually failed to pay the USD bond coupons. Investors might pay attention to the company's follow-up actions, especially whether it would arrange a restructuring for USD bonds. |
| RONXIN 7.350% 15Dec2023 Corp (USD) | 4.0 | |||
| R&F | - R&F completed the Exchange Offer, to convert three existing USD bonds into perpetual USD bonds. - R&F's total contracted sales in April 2024 was approximately RMB 0.8 billion, decreased by 54% YoY. - R&F’s equity interests of RMB 100 million in Shenzhen R&F Properties and 390 milllion in Guangzhou R&F Properties were frozen for 3 years. - R&F’s two promissory notes with approximately RMB 10 million have become overdue due to its phased capital shortage. - On 8th February, R&F planned to sell its UK property development project, with the loan consideration to be determined by the buyer based on the exchange offer to acquire all existing notes. The minimum principal amount is approximately HKD 6.25 billion. | GZRFPR 7.500% 11Jul2025 Corp (USD) | 6.1 | -R&F plans to significantly deleverage through the Exchange Offer, however, the conversion into perpetual bonds is extremely insincere for creditors, and we do not rule out that the company still has other options to deal with USD bonds, such as a rollover or an overall debt restructuring. |
| GZRFPR 6.500% 11Jul2027 Corp (USD) | 5.1 | |||
| Kaisa | - Kaisa received winding-up petition, which involves the principal amount of RMB 170 million and accrued interests. The first hearing date for the Petition is set on 13 September 2023. - In October 2023, Kaisa submitted a preliminary restructuring plan for its offshore creditors, and is still in the process of communicating with the Ad Hoc Group and does not yet have a finalized plan. - Kaisa has multiple projects included in the first batch of the 'whitelist', including projects in Chengdu and Chongqing. - The hearing of the winding-up petition of Kaisa has been further postponed to 27th May. | KAISAG 9.750% 28Sep2023 Corp (USD) | 5.0 | - Despite the resumption of trading on the Hong Kong Stock Exchange, based on the latest financial data, Kaisa's credit quality extremely deteriorated and its ability to operate normally in the future is still questionable. - Kaisa has not yet made substantial progress in restructuring its offshore debt, and the recovery value of the USD bonds is expected to be low due to large size of debt and small number of oversea projects. |
| Aoyuan | - Aoyuan filed for bankruptcy under Chapter 15 of the US Bankruptcy Code to protect its assets. The company has received sufficient creditor support to approve its restructuring plan, which was effective in 25 January. - The company announced its debt restructuring plan, involving new bonds, mandatory convertible bonds, debt into equity swap and perpetual bonds. Aoyuan's USD 6 billion debt restructuring plan was approved by Hong Kong Court. - Aoyuan has multiple projects, including Guangxi Nanning Yujiangnan, Chongqing Yuefu, Feicui Tianchen, and Hechuan Yuanshu, included in the whitelist. - Aoyuan announced it has agreed to all of the restructuring conditions with Add Hero, including the payment of all restructuring support agreement fees (cash portion). The effective date is 20th March. | CAPG 5.375% 13SEP2022 CORP (USD) | 2.0 | - While Aoyuan's debt restructuring plan is of fair quality, the plan is quite sincere. The major shareholder gives up some of his shares and USD bonds, and the company put all offshore assets and a few onshore assets for credit enhancement. However, the company's solvency is still weak. It is less likely that the company could repay the first round of principal repayment. |
| Redsun | - Redsun's total contracted sales in April 2024 was approximately RMB 0.7 billion, decreased by 68% YoY. - The company appointed Haitong International as their financial advisor to deal with offshore bonds. They failed to repay coupons of two bonds matured in Jan 2025 and April 2023, which triggered bond defaults. - Redsun 11 projects included in the 'whitelist’. And 2 more projects are currently under review. - Redsun received a petition for winding up filed by the London branch of BNY Mellon Bank in the Hong Kong High Court, regarding debt exceeding $230 million. - Redsun announced in the light of receiving support from approximately 94% of the holders of the senior notes for the 2024 Redsun’s restructuring proposal, the relevant winding-up petition hearing will be postponed to 15th July. | REDSUN 10.500% 03OCT2022 CORP (USD) | 1.8 | - The company's bond prices have now fallen to single-digit levels, which are at the level of default bond prices. It does not make sense to sell at the current market prices. |
| Powerlong | - Powerlong's total contracted sales in April 2024 was approximately RMB 1.1 billion, decreased by 64% YoY. - The company proposed a debt restructuring plan, with four options: (1) Cash, Mandatory Convertible Bonds and Powerlong Commercial Management Holdings Shares, (2) New Medium-Term Bonds, (3) New Long-Term Bonds and (4) New Loan. As of 26 April, around 88% eligible creditors signed the restructuring support agreement. The company is seeking a hearing in the High Court of Hong Kong to be scheduled for 18th July, 2024. | PWRLNG 6.950% 23JUL2023 Corp (USD) | 12.0 | - Option 1 allows creditors to recover cash as soon as possible. It is suitable for creditors who have concerns about the future solvency of the company, or investors who bought the bonds at a low price, providing them with an opportunity to exit. - Although there is around 50% principal haircut in Option 2, the priority of repayment is higher than that of the new long-term bonds and new loans in Option 3 and Option 4. If the company can fulfill most of its commitments to repay the principal and interest gradually, Option 2 has certain merits. - Both Option 3 and Option 4 do not have principal haircuts but have a lower priority for debt repayment than Option 2. Option 4 is better than Option 3 in terms of the repayment schedule, but investors have to be aware of the risks associated with the loan terms. |
| PWRLNG 6.250% 10AUG2024 Corp (USD) | 8.5 | |||
| Yuzhou | - Yuzhou's total contracted sales in April 2024 was approximately RMB 0.8 billion, decreased by 61% YoY. - Yuzhou released the offshore debt restructuring proposal. The Scheme Creditors have three options to convert their Existing Notes into different New Notes and/or newly issued ordinary shares. - Yuzhou announced that approximately 30% of the existing outstanding principal amount of creditors have signed or will join the overseas debt restructuring support agreement. - Yuzhou announced that as of 28th March, 94% of the public notes holders and 91% of the debt instruments holders have joined the restructuring support agreements, respectively. | YUZHOU 6.000% 25OCT2023 CORP (USD) | 7.0 | - The overall sincerity of Yuzhou's restructuring proposal is quite good, involving cash payments and installment payments, as well as strong credit enhancement measures. We believe that creditors can choose a proposal that suits their preferences. - However, Yuzhou's restructuring plan does not include off-balance-sheet debt, probably because the company has already reached an agreement with its off-balance sheet-creditors, which is unfair to other creditors. |
| Times China | - Times China's total contracted sales in April 2024 was approximately RMB 1.1 billion, decreased by 29% YoY. - The Group paid the upfront fee to onshore bondholders. The rollover plans for onshore bonds were passed at the end of February. The Group committed to pay 0.5% principal amount (for institutional investors) or up to RMB 100,000 (for individual investors) at the end of August. - Sino-ocean announced that the overseas USD securities will continue to be suspended from trading, and the company will formulate a debt restructuring plan with creditors. - Times China announced that Hang Send Bank has filed a winding-up petition against the company in the High Court, involving nearly RMB 2.1 billion financial responsibilities. The first hearing date is on 3rd July, 2024. | TPHL 5.550% 04JUN2024 CORP (USD) | 3.1 | - Times China has engaged CICC as its financial advisor for offshore bonds restructure. It is expected that it will take a longer period of time before the final proposal is available. - The majority of Times China's projects are located in the Greater Bay Area. The sales might pick up with the easing of real estate policies in the region. |
| Sino-ocean | - Sino-ocean's total contracted sales in January 2024 was approximately RMB 1.2 billion, decreased by 64% YoY. - Sino-ocean successfully rolled 10 onshore bonds, with a total amount of RMB 18.3 billion. - Sino-ocean announced that the overseas USD securities will continue to be suspended from trading, and the company will formulate a debt restructuring plan with creditors - Sino-ocean has approximately 40 projects included in the “whitelist”. The new included projects are primarily located in Zhengzhou, Jinan, Dalian, and Foshan. | SINOCE 2.700% 13Jan2025 Corp (USD) | 9.0 | - The Group officially defaulted on the public market, which fits the market expectation. Going forward, thanks to its SOE-background and the support from the major shareholders, we believe that there is still a possibility of a turnaround after the restructuring and industry recovery. |
| China SCE | - China SCE’s total contracted sales in 2023 was approximately RMB 27.8 billion, decreased by 53% YoY. - The company's original auditor, Ernst & Young (EY), was resigned. The company appointed Prism as the new auditor of the company. - Due to the company's failure to pay installments of principal and interest under the syndicated loan agreement, a series of default events were triggered. On 15 December, the company received an enforcement notice of 504 million of its shares in SCE CM. Chow Wai Shing Daniel of FTI Consulting and Aaron Luke Gardner of FTI Consulting had been appointed as joint and several receivers of the charged shares. - China SCE announced that the company has been engaging with offshore creditors to consolidate a debt solution. But there is no guarantee whether the solution can be implemented on time. | CHINSC 5.950% 29Sep2024 Corp (USD) | 5.0 | - China SCE already defaulted on its offshore bonds. It goes into debt restructuring progress. Considering that the company has a higher proportion of rental revenues, it has a possibility of a turnaround. - Since the company's property management shares were pledged and were taken in the enforcement action, it is difficult for offshore creditors to claim its property management shares. |
(Small Chinese Real Estate Developers)
| Company | Latest Development | Related Bonds | Ask Price (Investors Buy) | Commentary |
| Fantasia | - Fantasia published a new restructuring plan in April. Several changes are made compared to the old plan, including the tenor and coupon rate of the new bonds. - The deadline of participating in the restructure support agreement is 21 May 2024. | FTHDGR 7.950% 05JUL2022 CORP (USD) | 2.8 | - Overall, the new plan is a significant downgrade to the original plan. However, considering the fact that the Chinese real estate sector is still deteriorating, we think Fantasia’s restructuring plan is quite sincere somehow. At least bondholders can replace approximately 70% of their debts into new bonds after the completion of debt-to-conversion, which the haircut percentage is not bad compared to the plans from other property developers. |
| FTHDGR 12.250% 18OCT2022 CORP (USD) | 2.8 | |||
| Redco | - Redco’s total contracted sales in 2023 was approximately RMB 9.4 billion, decreased by 66% YoY. - Redco missed on several coupon payments on USD bonds since August, which triggered the default events. - The company successfully re-submitted the 2022 annual result, 2023 interim result and 2023 annual result on 24 April. | REDPRO 10.500% 06JAN2023 CORP (CNY) | 2.3 | - Based on our news, Haitong International, which the company appointed as its financial advisor, dropped out of contact with the company. - However, the company is seeking to resume shares trading in HKEX, and resubmitted the results. It could be able to resume shares trading before the compulsory delisting of HKEX. If this is successful, it will be favourable for company to suggest a debt restructuring plan. |
| Hopson | - Hopson's total contracted sales in April 2024 was approximately RMB 1.5 billion, decreased by 5% YoY. - Fitch affirmed Hopson Development’s rating at B+ and placed stable outlook. - The company fully repaid the USD bond due on 28 December 2023, with a principal amount of around USD 220 million. | HPDLF 6.800% 28DEC2023 CORP (USD) | 99.8 | - The Company's off-balance sheet debt indicators are healthy, with manageable size of its off-balance sheet debt. The company's substantial commercial real estate and financial assets are the potential sources of liquidity needs. The company has stronger solvency. -Bond due in May this year is trading at above $90, reflecting the market's optimistic view on the company's debt repayment as scheduled. |
| HPDLF 7.000% 18MAY2024 CORP (USD) | 100.0 | |||
| Central China | - Central China's total contracted sales in April 2024 was approximately RMB 0.8 billion, decreased by 26% YoY. - Central China suspended all USD bond payment on principal and interests, resulting in bond defaults. - The company appointed SHINEWING CPA Limited as an auditor. | CENCHI 7.250% 24APR2023 CORP (USD) | 3.6 | - Central China is the first developer with SOE-background which fell into an actual default, fully reflecting the extremely depressed state of the industry. Going forward, Central China should formulate a debt restructuring plan to settle its offshore debt holistically. - The company's willingness to repay its debts in the past was strong. We believe there is still a possibility of a turnaround after the restructuring and industry recovery. |
| CENCHI 7.650% 27AUG2023 Corp (USD) | 3.8 | |||
| Sinic | - In August, the company received a petition for winding up against the Company about a private bond, which was filed in the High Court of Hong Kong. The hearing was adjourned to 7 December 2022. The High Court of Hong Kong issued a winding up order against Sinic Holdings. The company's creditors appointed Kroll as the company liquidator. | SINHLD 10.500% 18JUN2022 CORP (USD) | 1.2 | - Sinic's bonds are the lowest amongst Chinese real estate bonds. This reflects the market expects a low recovery value of its bonds. - The winding up order was issued by Court of Hong Kong, which means investors might get back a very small amount of principal after liquidation. But the liquidation process might take long time. |
| Jiayuan | - Jiayuan’s liquidators have received more than RMB 30 billion claims. They believe that it is complicated to raise the funds required for the restructuring but they are working to seek support from creditors to ensure the success of its restructuring. - Jiayuan International received a petition for winding up against the Company filed in the High Court of Hong Kong. The High Court of Hong Kong issued a winding up order against Jiayuan International. The company's creditors appointed PwC as the company liquidator. The company’s shares will remain suspended from trading. - The company was provided with a loan of HKD 100 million by an investor, which will be used for settling the professional fees and expenses about the proposed restructuring. - Jiayuan announced that the company has hired Red Smith Richards Butler LLP as its legal advisor and Deloitte & Touche as its financial advisor. | JIAYUA 12.000% 30OCT2022 CORP (USD) | 2.8 | - The Hong Kong court issued a winding up order, but the company's liquidator might cooperate with different parties to come up with a restructuring plan. The uncertainty remains high, with significant variables. |
| JIAYUA 13.750% 18FEB2023 CORP (USD) | 2.5 | |||
| Roadking | - Roadking’s total contracted sales for 3m2024 were approximately RMB 4.1 billion, decreased by 51.3% YoY. - Moody's downgraded Roadking's ratings to B3 and maintained the negative outlook, mainly because of an expected deterioration of financial flexibility and weakening of liquidity buffer. - Road King completed the sales of shares in four highways to China Merchants Expressway Network & Technology Holdings for a price of RMB 4.0 billion. | ROADKG 5.900% 05Mar2025 Corp (USD) | 36.0 | -The investment properties the company owns in Hong Kong and China could be potential collateral for further fundraising. The company sold out toll roads in China, recording cash inflow of over HKD 3.0 billion, suggesting that the company is less likely to get into distress in the near future. - The company still has some sellable projects in Hong Kong, and the cash flow generated may be helpful for debt repayment. |
| ROADKG 6.700% 30Sep2024 Corp (USD) | 52.4 |
Sources:
Internet Resources, Company's Announcement, Bondsupermart. Bond Price
Data as of 17 May 2024
Declaration: For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds positions in COGARD 6.500% 08Apr2024 Corp (USD), EVERRE 8.250% 23Mar2022 Corp (USD), FTHDGR 7.950% 05Jul2022 Corp (USD), FTHDGR 6.950% 17Dec2021 Corp (USD), REDPRO 10.500% 06Jan2023 Corp (CNH), SHIMAO 3.975% 16Sep2023 Corp (USD), SUNAC 1.000% 30Sep2032 Corp (USD), SUNAC 6.000% 30Sep2025 Corp (USD), SUNAC 6.250% 30Sep2026 Corp (USD), SUNAC 6.500% 30Sep2027 Corp (USD), SUNAC 6.750% 30Sep2028 Corp (USD), SUNAC 7.000% 30Sep2029 Corp (USD), SUNAC 7.250% 30Sep2030 Corp (USD), SHIMAO 3.975% 16Sep2023 Corp (USD) and the analyst who produced this report holds a NIL position in the abovementioned securities.
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