Bond Market News

China SCE has sought to reassure investors after reports of missed payments on RMB 1.6bn ($223mn) of its local trust products by saying that the investment was backed by sufficient valuable assets. The trust product was used to finance the construction of a residential and commercial project and SCE said that the project was valued at ~RMB 3bn ($420mn), sufficient to cover the trust. They added that sales of the project were normal, topping RMB 50mn ($7mn) in September. Everbright Trust had sued SCE saying that the developer and its guarantor did not pay either the principal or the returns, and therefore “materially violated” the contract. Separately, SCE said it repaid two dollar bond coupons amounting to $31.8mn in the past two weeks, in a bid to instill confidence in its ability to pay its debts. SCE’s dollar bonds were trading over 0.5 points lower at 10-15 cents on the dollar.

Separately, Evergrande’s unit Hengda Real Estate will hold a bondholder meeting regarding a proposed six-month coupon delay on a local yuan-denominated note from 19 October 2022 to 19 April 2023. The total interest due is RMB 121.8mn ($17mn). Evergrande’s dollar bonds were trading over 0.3 points weaker at 4-5 cents on the dollar.

Also, in related Chinese property news, RiseSun Real Estate has launched a consent solicitation for two of its dollar bonds, seeking to waive missed coupon payments. The bonds in question are its 9.5% 2023s and 9.5% 2024s. The issuer will pay a consent fee of $2.5 per $1,000 in principal to holders who consent by October 25. RiseSun’s dollar bonds were trading flat at 39-35 cents on the dollar.