Panic-stricken investors drive down Chinese developer Agile’s bonds amid rumours about its ability to repay loans

Name: Evergrande debt crisis: How likely is it that bondholders can recoup their investments?
Uploaded: 2021-10-22T11:46:40.000Z
Duration: 8 min 8 s
Description: Evergrande debt crisis: How likely is it that bondholders can recoup their investments?

Hong Kong-listed developer quickly moves to reassure investors that it has funds to service its debt, including off-balance sheet loans

Guangzhou-based developer sees prices of 11 US dollar denominated bonds slump

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Agile Group Holdings’ bond prices were hit by market rumours on Friday. Photo: Imaginechina via AFP

Pearl Liu

Published: 7:46pm, 22 Oct 2021Updated: 8:51pm, 24 Oct 2021

Chinese developer Agile Group Holdings on Friday tried to reassure investors that it has enough money on hand to service debt, including off-balance sheet loans, after rumours drove down its bond prices.

The prices of 11 US dollar dominated bonds of the Guangzhou-based Chinese developer plunged as panic-stricken investors sold the notes amid speculation that the company could struggle to make coupon payments due soon.

“The company only has one off-balance sheet loan due in November worth US$250 million and there is no more,” an Agile spokesman said in a briefing to investors. “We have enough money to pay our debts, both onshore and offshore.”

Agile had 38 billion yuan (US$5.9 billion) of cash as of the end of September, including 10 billion yuan of restricted cash, the spokesman said.

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Evergrande debt crisis: How likely is it that bondholders can recoup their investments?

Its most active US dollar-denominated bond due October 2025 declined to 85 cents on the dollar on Friday from 101 cents three months ago, while one of its perpetual bonds dropped to 75.5 cents.

The debt woes of China Evergrande Group, weighed down by US$305 billion of liabilities, have plagued bond and equity markets for the past few months, making investors extremely jittery. On Thursday, China’s largest developer by sales made a US$83.5 million interest payment on its offshore bond, just before a 30-day grace period would have declared it in default.