Fantasia Bonds Fall to Record as Shenzhen Blocks Four Flats

Bonds of Fantasia Holdings Group Co., a developer based in China’s southern city of Shenzhen, plunged to record lows after authorities stopped processing transaction agreements for four apartment units.

2015-01-15 05:21:49.528 GMT

(Updates with PR firm response in fifth paragraph.)

By Moxy Ying and Tanya Angerer

(Bloomberg) -- Bonds of Fantasia Holdings Group Co., a developer based in China’s southern city of Shenzhen, plunged to record lows after authorities stopped processing transaction agreements for four apartment units.

The company’s 2019 notes denominated in dollars slumped to 65.1 cents from 77 cents yesterday as of 1:18 p.m. in Hong Kong, the lowest since they were sold to investors at par, or 100 cents on the dollar, in January 2014. Shares in the builder dropped as much as 16.3 percent, the most on record, before climbing to HK$0.79, the lowest since October 2012. Four individual apartment units in Shenzhen have been placed under a “restricted” status on the municipality’s website, which didn’t indicate when the change was made.

Fantasia is the latest developer in the city to come under scrutiny after Kaisa Group Holdings Ltd. also had several of its projects there frozen and then last week missed a coupon payment on $500 million of its dollar bonds. Kaisa is being investigated about links to a senior Shenzhen official who’s under a probe, two people familiar with the matter said earlier this week.

“We have no information yet as to why the four units have been locked and will continue to seek comment from the company,” Charles Macgregor, the head of Asia high-yield research at Lucror Analytics Pte, a Singapore-based independent credit researcher, wrote in a note. “Investors are wary of any possible regulatory or political risks associated with Chinese property developers.”

The four apartment units have already been sold and don’t belong to the company any more, Natalie Tam, of public relations firm iPR Ogilvy Ltd., said on behalf of Fantasia. Two calls to Fantasia’s investor relations department in both Hong Kong and Shenzhen went unanswered.

Fantasia, which develops commercial and residential properties in the Chengdu-Chongqing Economic Zone and the Pearl River Delta region, has $1.08 billion-equivalent of bonds outstanding, according to data compiled by Bloomberg. Its $250 million of 2017 debentures plunged 14.4 cents to 80.2 cents on the dollar, a record low.

--With assistance from Christopher Langner in Singapore and Michelle Yun in Hong Kong.

To contact the reporters on this story:

Moxy Ying in Hong Kong at +852-2977-4736 or yying13@bloomberg.net; Tanya Angerer in Singapore at +65-6212-1880 or tangerer@bloomberg.net To contact the editors responsible for this story:

Katrina Nicholas at +852-2977-6623 or knicholas2@bloomberg.net