Evergrande domestic debt deal calms immediate contagion concern



(Corrects billion to million in 6th paragraph)

* Evergrande unit says it settled a bond coupon payment

* Investors, analysts play down threat of "Lehman moment"

* Fed's Powell expected to be asked about Evergrande

* Shares rise 20% in Frankfurt; HK closed

By Anshuman Daga and Andrew Galbraith

SINGAPORE/SHANGHAI, Sept 22 (Reuters) - China Evergrande agreed to settle interest payments on a domestic bond on Wednesday, while the Chinese central bank injected cash into the banking system, soothing fears of imminent contagion from the debt-laden property developer.

Evergrande 3333.HK , Asia's biggest junk bond issuer, is so entangled with China's broader economy that its fate has kept global stock and bond markets on tenterhooks as late debt payments could trigger so-called cross-defaults.

Many financial institutions have exposure to Evergrande through direct loans and indirect holdings, while any defaults will also trigger sell-offs in the high-yield credit market.

In an effort to reassure investors, the People's Bank of China's injected 90 billion yuan to the banking system, signalling support for markets as they braced for what is expected to be one of China's largest-ever debt restructurings.

Evergrande is scrambling to avoid defaulting on a number of bonds with payments due this week and its main unit, Hengda Real Estate Group, said on Wednesday it had "resolved" one coupon payment due on Thursday on its Shenzhen-traded 5.8% September 2025 bond CN149247=SZ , via "private negotiations".

It did not specify how much interest would be paid or when, nor did Hengda mention Evergrande's other pressing debts, leaving it unclear what this means for $83.5 million in dollar bond interest payments due on Thursday.

Evergrande did not immediately respond to questions about its deal or its intentions.

But engagement with bondholders, a common way to avoid default, on top of chairman Hui Ka Yuan's vow this week that Evergrande would "walk out of its darkest moment," cheered investors and soothed markets more broadly.

"These events seem to suggest that the company is taking control of the situation and is trying its best to work out a solution with creditors," Singapore-based Dexter Tan, a senior fixed income analyst at Bondsupermart.com, said.

Evergrande, which epitomised the borrow-to-build business model and was once China's top-selling developer, also has a $47.5 million dollar-bond interest payment due next week.

"We do not have a clearer picture as how Evergrande settled its onshore coupon," Singapore-based Chuanyo Zhou, a credit analyst at Lucror Analytics, said.

"It doesn't look like a cash payment. It may still miss the coupon on offshore bonds due tomorrow."

Evergrande's Hong Kong shares did not trade due to a public holiday but rose 40% in Frankfurt EV1.F to 0.38 euros ($0.45).

Its dollar bonds maturing next year VG158043114= and in 2024 remained VG158786753= below 30 cents on the dollar.

In the wider market, the U.S. dollar slipped and S&P 500 futures ESc1 rose in Asia and European trade.

BREAKDOWN

Analysts have been downplaying the risk that a collapse threatens a "Lehman moment", or liquidity crunch, which freezes the financial system and spreads globally.

Only some $20 billion of $305 billion outstanding debts is owed offshore, according to Refinitiv data.

But the risk of failure remains high, particularly if offshore bondholders are less willing than those in China to cut deals, and the fallout has already begun to trigger tremors in the property market of the world's second-largest economy.

"Developers there have long claimed that the success of their business is driven by the three carriages: high turnover, high gross profit, and high leverage," said Michael Pettis, a nonresident senior fellow at the Carnegie–Tsinghua Center for Global Policy, in a blog post.

"But all of these proverbial carriages are breaking down as the effects of Evergrande's crisis spread."

There is also mounting political pressure to act as the anger of retail investors with their savings sunk in Evergrande properties or wealth management products swells.

Asked at a regular daily briefing on Wednesday whether China would take measures to intervene, foreign ministry spokesman Zhao Lijian only referred to the "responsible departments".

Despite the risks, some funds have been increasing their positions in recent months. BlackRock and investment banks HSBC and UBS have been among the largest buyers of Evergrande's debt, Morningstar Link data and a blog post showed.

Other bondholders include UBS Asset Management and Amundi, Europe's largest asset manager.

($1 = 6.4665 Chinese yuan)($1 = 0.8524 euros)



Investors grappling with Evergrande fallout weigh risk of wider
pain

China’s property investment slows Link FACTBOX-What analysts have to say about Evergrande as default risks rise

Evergrande's debt pile Link BlackRock, HSBC among largest buyers of Evergrande debt: Morningstar



Reporting by Anshuman Daga in Singapore, Andrew Galbraith and Samuel Shen in Shanghai. Additional reporting by Hideyuki Sano in Tokyo, Clare Jim in Hong Kong and Gabriel Crossley in Beijing. Writing by Anne Marie Roantree and Tom Westbrook. Editing by Richard Pullin, Jacqueline Wong and Alexander Smith

免責聲明: XM Group提供線上交易平台的登入和執行服務,允許個人查看和/或使用網站所提供的內容,但不進行任何更改或擴展其服務和訪問權限,並受以下條款與條例約束:(i)條款與條例;(ii)風險提示;(iii)完全免責聲明。網站內部所提供的所有資訊,僅限於一般資訊用途。請注意,我們所有的線上交易平台內容並不構成,也不被視為進入金融市場交易的邀約或邀請 。金融市場交易會對您的投資帶來重大風險。

所有缐上交易平台所發佈的資料,僅適用於教育/資訊類用途,不包含也不應被視爲適用於金融、投資稅或交易相關諮詢和建議,或是交易價格紀錄,或是任何金融商品或非應邀途徑的金融相關優惠的交易邀約或邀請。

本網站的所有XM和第三方所提供的内容,包括意見、新聞、研究、分析、價格其他資訊和第三方網站鏈接,皆爲‘按原狀’,並作爲一般市場評論所提供,而非投資建議。請理解和接受,所有被歸類為投資研究範圍的相關内容,並非爲了促進投資研究獨立性,而根據法律要求所編寫,而是被視爲符合營銷傳播相關法律與法規所編寫的内容。請確保您已詳讀並完全理解我們的非獨立投資研究提示和風險提示資訊,相關詳情請點擊 這裡查看。

我們運用 cookies 提供您最佳之網頁使用經驗。更改您的cookie 設定跟詳情。

風險提示: 您的資金存在風險。杠杆商品可能不適合所有客戶。 請詳細閱讀我們的風險聲明