Heavily indebted developer China Evergrande to sell onshore bonds worth US$1.3 billion

Name: Cheap housing but few economic opportunities for young Chinese in city along Russian border
Uploaded: 2021-04-22T13:50:08.000Z
Duration: 8 min 7 s
Description: Cheap housing but few economic opportunities for young Chinese in city along Russian border

Proceeds from the sale will be used to meet an early repayment request on bonds maturing in 2023

Hengda Real Estate, the company’s Shenzhen unit, has proposed the bond sale, according to documents filed with the city’s stock exchange

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A China Evergrande housing project in Hong Kong’s Tuen Mun district. Photo: May Tse

Pearl Liu

Published: 9:50pm, 22 Apr 2021Updated: 11:56am, 15 Sep 2021

China Evergrande, the country’s most indebted property developer, plans to sell onshore bonds worth 8.2 billion yuan (US$1.3 billion) to pay down debts that are due soon.

Hengda Real Estate, the company’s Shenzhen unit, has proposed the bond sale, with an indicative interest rate range of between 5.5 per cent and 7.5 per cent, according to documents filed with the Shenzhen Stock Exchange on Thursday. The bonds are to mature in five years.

The proceeds from the sale will be used to meet an early repayment request due on May 6 made by the investors of bonds worth 15 billion yuan maturing in 2023.

Chinese property developers have emerged as the country’s most indebted companies after Beijing reined in the heavily geared real estate sector as it sought to maintain financial stability while the country’s economy recovered from the dislocation caused by the coronavirus pandemic. The central government outlined “three red lines” for the sector in August, putting limits on borrowing.

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Cheap housing but few economic opportunities for young Chinese in city along Russian border

Evergrande, which is chaired by billionaire Hui Ka-yan, owed 670 billion yuan as of the end of last year. It has failed to meet Beijing’s deleveraging targets, which cap debt-to-asset ratios for developers at 70 per cent, net debt-to-equity at 100 per cent and short-term borrowings at no more than cash reserves.