Evergrande bondholders not paid after grace period; Kaisa gets deferral plan

[BEIJING] Some China Evergrande Group bondholders have not received overdue coupon payments after the end of a month-long grace period, putting the world's most indebted property developer on the brink of its first default on offshore notes.

A group of Kaisa Group bondholders have sent the beleaguered property firm a formal forbearance proposal, which may buy some time and help it avoid a default on US$400 million dollar bonds due Tuesday.

Shares in China's real-estate companies jumped after policy makers moved to expand support for the economy as a property market downturn threatens to hamper growth into next year.

Evergrande dollar bonds were largely unchanged on Tuesday with the note due March 2022 at 22.5 US cents on the dollar, while its bond due 2025 stood at 18.6 US cents, Bloomberg-compiled prices show. The shares erased a gain of 8.3 per cent, the biggest jump in two weeks to trade 1.1 per cent higher.

Some China Evergrande Group bondholders had yet to receive overdue coupon payments by the end of a month-long grace period, signalling a possible default by the developer as it prepares for one of China's largest-ever debt restructurings.

Two holders of the dollar notes sold by Evergrande's Scenery Journey unit said they hadn't received the payments as of 12:30 am New York time Tuesday. The coupons - US$41.9 million for a note maturing in 2022 and US $40.6 million for a bond due the following year - were initially due Nov 6, with a 30-day grace period.

The holders spoke on condition of anonymity to discuss private investments.

Evergrande didn't immediately respond to a request for comment.

A Bloomberg gauge of Chinese developers rose 3.2 per cent to its highest since Nov 19 after President Xi Jinping oversaw a Politburo meeting on Monday that concluded with a signal of an easing in curbs on real estate.

The People's Bank of China also on Monday said it will reduce most banks' reserve requirement ratio by 0.5 percentage point next week, releasing US $188 billion of liquidity.

BLOOMBERG