Sunac, Shimao and Oceanwide roiled in the capital markets amid concerns about ongoing cash crunch among China’s leveraged developers
- Sunac Holdings’ shares and bonds slumped as the developer’s stakes in two companies were frozen by a Shenzhen district court
- China high-yield bonds fall to the lowest level since September 2015, as Shimao and Oceanwide problems continue
Several Chinese developers were roiled in the capital markets amid concerns about the ongoing cash crunch among the heaviest borrowers, even after China’s monetary authorities eased the grip on the nation’s financial liquidity to stimulate the economy.
The bonds and shares of Sunac Holdings slumped after its stakes in at least two companies were frozen by a court in Shenzhen.
Sunac’s US$600 million offshore bonds due on January 26, 2026 slumped to a record low of 46.792 cents on the dollar, while its US$600 million bond due June 14 slid to 63 cents on the dollar, close to a record low. The Beijing-based company’s shares in Hong Kong lost 3.1 per cent to HK$11.80.
Sunac’s stake in Shanghai Sunac Property Development Company was frozen by the Shenzhen Baoan District court on January 5, while a 50 million-yuan stake in Wuhan Sunac Jiye Holdings Company was frozen on January 7, both for three years, according to Tianyancha, a company information and data provider.
The tumult, which amounted to “a small dispute with the partner, had been resolved,” Sunac said in a statement, adding that both parties were “actively working in accordance with the procedures to unfreeze Sunac’s stakes.”