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Bond Market News

Evergrande’s Hengda Unit Fails to Obtain Consent to Delay Local Bond Payment

China Evergrande’s onshore unit Hengda Real Estate’s local bondholders rejected a proposal to delay repayment of its RMB 4.5bn ($671mn) 6.98% bonds puttable in January 2022, that were issued in 2020. Earlier, Hengda had gotten approval to extend the put option till July 8, but now failed to obtain consent for an extension till January 2023. Hengda expects to reach an agreement with bondholders soon. Evergrande is already grappling with $300bn in liabilities and trying to extend local bond payment timelines to avoid technical defaults, having already defaulted on its dollar bonds. The developer’s restructuring details are pending, but it has come under scrutiny after Top Shine Global Ltd., an investor in an Evergrande unit had filed a winding-up petition against it because it did not honor a financial obligation. Evergande said it would “vigorously” oppose the petition, and that the litigation would not impact offshore debt restructuring plan.

Hengda’s dollar bonds were trading at distressed levels of 6-7 cents on the dollar.

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