Real estate stocks are increasing; Rules for the sale of land relaxed: update of Evergrande


Chinese real estate stocks posted sudden gains on Friday afternoon in Hong Kong, pushing the industry gauge to its maximum in a week as investors hope for policy easing.

A Bloomberg index of real estate companies listed in Hong Kong and mainland China climbed 4.7%, in part fueled by an 8.3% gain in China Evergrande Group. Country Garden Services Holdings Co., which fell 17% earlier on Friday after announcing a $ 1 billion stock offering, cut its losses to 8.5%.

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Previously, several Chinese cities reportedly relaxed the rules for selling land as the interest of cash-strapped developers waned. It was the latest sign of increasing pressure on local governments as the housing market slowdown intensifies.

Key developments:

  • Rise in shares of Chinese developers; Evergrande increases by 8.3%
  • Chinese real estate developers’ liquidity stress will continue: Moody’s
  • Evergrande unit resumes work in 63 residential projects in Guangdong
  • Chinese cities relax land auction rules as real estate stress spreads
  • Yango Group Obtains Bondholder Approval for Exchange Offer
  • Evergrande asks agents in Hong Kong to sell more apartments for due fee: SCMP

Chinese Developer Shares Rise (2:51 p.m. HK)

A Bloomberg Intelligence gauge of Chinese real estate developers climbed 4.7%, the highest in a week, with China Evergrande Group advancing 8.3%. The index, which measures stocks listed on both the mainland and Hong Kong, was heading for its first gain in three days.

Agile Provides Funds to Pay Off HKD and USD Loans (1:21 p.m. HK)

Agile Group Holdings Ltd. has provided funds for the repayment of a HK $ 3.34 billion ($ 429 million) loan and a $ 60 million loan which are both due on Nov. 22, according to a stock exchange filing from Hong Kong.

Chinese developers’ liquidity stress will continue: Moody’s (1:10 p.m.)

Limited access to finance from Chinese real estate companies, slowing contract sales and weakening project-level liquidity controls are dragging cash flow and liquidity, Moody’s Investors Service said in a report.

Everrgrande Resumes Work on Guangdong Projects (1:00 p.m. HK)

Evergrande’s main onshore real estate development subsidiary said it has resumed construction of 63 housing projects in Guangzhou, Foshan and other cities in southern Guangdong province, the company said. The unit reiterated its commitment to deliver quality apartments.

Chinese Cities Relax Land Auction Rules (12:50 p.m. HK)

Some Chinese cities have relaxed the rules for selling land after cash-strapped developers became reluctant to bid, threatening local governments’ main source of revenue.

Several major cities, including Shanghai and Nanjing, have announced details of their plans to sell land in December, offering more land than in the last round, the official Securities Times reported. Some relaxed trading conditions for developers, such as reducing deposits before bidding or refraining from requesting full payment within a month, the newspaper reported.

Country Garden Services tumbles after $ 1 billion placement (11:18 a.m. HK)

Country Garden Services fell 17% in Hong Kong trading, a day after announcing it was seeking to raise HK $ 8 billion ($ 1.03 billion) through a sale of shares, the latest Chinese real estate company to tap the stock markets amid a liquidity squeeze engulfing the industry. Its shares were trading around the HK $ 51 level late in the morning, after the company confirmed the placement price at HK $ 53.35 per share on Thursday.

Zhongliang Delivers Bond Payment (8:15 a.m. HK)

Zhongliang Holdings Group Co. said it turned over funds to the trustee for repayment of outstanding principal and accrued interest on a dollar bond that matured this month, according to a Hong Kong Stock Exchange filing.

Evergrande asks Hong Kong agents to sell more apartments (7:56 a.m. HK)

China Evergrande Group offers to pay the unpaid commissions due on two apartments for each additional apartment of similar value that agents sell in one of its projects in Hong Kong, the South China Morning Post reported, citing notes from a series meetings between developers and real estate agencies.

Evergrande attributed the late payment to its cash flow problems, saying the project’s funding structure “also prevented taking a large amount of funds to pay commissions.”

Yango Gets Debt Swap Deal (7:36 HK)

A unit of Yango Group Co. announced that bondholders had approved its offer to swap three of its bonds for dollars, according to a filing on the Hong Kong Stock Exchange on Thursday.

The developer will issue $ 669.9 million in new notes due in September to replace the three existing bonds. Yango Justice International Ltd. proposed the debt swap on Nov. 1 after seeing “enormous pressure” on short-term liquidity, saying then that if the support is insufficient the company “may not be able to repay” the existing notes.

An overview of Evergrande’s maturity schedule:

Dollar bonds Coupon maturity date The grace period ends Rising

(million bucks)

TIANHL 13% due in 2022 November 6 December 6 41.93
TIANHL 13.75% due in 2023 November 6 December 6 40.56
EVERRE 7.5% due 2023 December 28 January 27 50.43
EVERRE 8.75% maturity 2025 December 28 January 27 204.77

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