HONG KONG Reuters - Chinese property bonds remained stable on Tuesday after two major developers made coupon payments, although the market remained focused on the potential for default by China Evergrande Group this week.
The bond market has responded positively to comments from China's central bank on Friday and Sunday saying that spillover effects from Evergrande's debt problems on the banking system were controllable and that China’s economy was doing well Sunac China, which has a $27.14 million payment due Tuesday, has paid its bondholders, a source with direct knowledge of the matter said.
The source declined to speak to the media and was not authorised to be identified. A Sunac representative did not immediately respond to request for comment.
Kaisa Group said on Monday it had paid a coupon due Oct. 16 and plans to transfer funds for a coupon worth $35.85 million due Oct. 22 on Thursday.
2 developer, with $300 billion in debt and having missed a series of bond payments, has roiled global markets. High-yield bonds issued by Chinese property developers have been particularly hammered.
An Evergrande bond due March 23, 2022 will officially be in default if the company does not make good after a 30 day grace period for a missed coupon payment that had been due on Sept. 23rd.
Bonds from Chinese developers that gained on Tuesday included Central China Real Estate's 2022 bonds which bounced over 8% to 40.250 cents on the dollar, while Modern Land's 2024 bonds rose more than 5% to 44.843 cents in China.
On Monday, smaller developer Sinic Holdings defaulted on $246 million in bonds as expected. It had warned of the default last week, saying that it did not have enough financial resources.