Stocks and Bonds Jump Amid Asset-Sale Talk: Evergrande Update

Published 24 January 2022, 13:41:10.708 GMT

(Bloomberg) -- China’s efforts to spur asset sales by cash-strapped property developers are starting to gain momentum with a flurry of deals, potentially easing the industry’s debt crisis. 

Shares and bonds in property companies rose, with China Evergrande Group’s stock briefly jumping the most in 10 weeks after signs of progress in its restructuring and the appointment of an official from a state-owned distressed-debt manager to its board. The company, which faces coupon payment deadlines totaling $352.5 million on Monday, urged offshore bondholders not to adopt aggressive legal action over repayments.

Shares climbed in Hong Kong after its dollar bonds jumped late Friday. REDD reported that the Guangdong government plans to release a debt restructuring framework by March. Guangdong’s local government proposes to restructure Evergrande’s debt out of court and plans to separate the offshore debt and assets from the company’s onshore overhaul, according to the report.

“We view this development positively as it provides some guidance on likely recovery values,” said Charles Macgregor, head of Asia at Lucror Analytics. He added that offshore investors may expect to receive 20-25 cents on the dollar.

By Jan Dahinten

--With assistance from Natalie Lung, Alfred Liu, David Watkins, Charlie Zhu, Tongjian Dong, Qingqi She, Rebecca Choong Wilkins and Alice Huang