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Bond Market News
Evergrande Bonds Inch Lower On Reports of Cutting Stake in Shengjing Bank
June 16, 2021
Caixin’s WeNews reported that the local government of Liaoning province is discussing diluting Evergrande’s stake in Shengjiang Bank. Evergrande and Shengjing Bank did not comment on the news. Evergrande is the lender’s largest shareholder and Shengjing Bank holds a large amount of Evergrande’s bonds as per Bloomberg. The update follows WeNews’ earlier coverage that the CBIRC was examining more than CNY 100bn ($15.7bn) of transactions between the developer and the bank. WeNews states that Evergrande increased its stake indirectly by using proceeds from its bonds, post which the lender bought bonds of the property developer. Other factors weighing on the company of late include regulators asking banks to stress test their exposure to Evergrande and Beijing’s tightened rules on banks’ cash management products, a big source of liquidity for property developers, said Castor Pang of Core Pacific Yamaichi.
Evergrande’s bonds fell over 1% yesterday and are now stable – its 7.5% 2023s were at 74.2 and its 12% 2024s at 78.2.
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