Utopia Talk / Politics / China: Shimao misses $1B repayment

murder Member	Sun Jul 03 17:06:14 Chinese property developer Shimao misses repayment on $1 billion bond HONG KONG, July 3 (Reuters) - Chinese property developer Shimao Group (0813.HK) has missed the interest and principal payment of a $1 billion offshore bond due on Sunday, in the latest blow to China’s embattled property market. The non-repayment was the first missed public offshore payment for the Shanghai-based developer. With an outstanding $6.1 billion international bonds, Shimao is the sixth largest issuer among Chinese developers, according to Refinitiv. China's property sector has been hit by a series of defaults on offshore debt obligations, highlighted by China Evergrande Group (3333.HK), once the country's top-selling developer but now the world's most indebted property company. Three of the top five issuers - Evergrande, Kaisa Group (1638.HK) and Sunac China (1918.HK) - have already defaulted their dollar bonds. Shimao was unable to pay a total of $1.02 billion in principal and interest to creditors of the 4.75% senior notes, the developer said in a Sunday filing on the Hong Kong bourse, citing "market uncertainties over debt refinancing" and "challenging operating and funding conditions". It added that it also did not make principal payments under certain other offshore indebtedness, without giving details. The developer has not received notice of acceleration of repayment from its lenders, it said, suggesting the debtholders have not moved to take enforcement actions. Shimao hired Admiralty Harbour Capital as its financial adviser and Sidley Austin its legal adviser to help assess and explore ways to manage the liquidity crisis. Meanwhile, creditors of its two syndicated loans have agreed to give the cash-strapped Chinese developer a breather. Shimao said it had received written notice of support from the majority of the lenders of two syndicated loans agreed upon in 2018 and 2019, in which HSBC acted as the lead facilitator for dual currency loans. The creditors, who are "generally supportive of the company continuing to explore the possibility of an agreement and implementation of a potential restructuring with its relevant stakeholders", were willing to allow Shimao to continue to run the business with minimum disruption, according to the filing. Shimao's bond in question traded at 12.141 cents on the dollar on Friday, according to Duration Finance. Shimao has been extending its debt obligations onshore and disposing of assets to raise fund, while its contracted sales in the first five months dropped 72% from a year ago. http://www...payment-1-bln-bond-2022-07-03/
Habebe Member	Sun Jul 03 17:12:24 I have no clue what to make of this. Is this a continued slide of the C housing market? It didn't seem to really have that big of a splash when the much bigger evergreens defaulted.
nhill Member	Sun Jul 03 23:36:49 The Evergreen bond defaults have contributed to one the worst first 2 quarters performance since the dot-com bubble. The entire recession is a liquidity crunch, my friend, from all sources.
nhill Member	Sun Jul 03 23:38:09 S&P 500 has had the worst first two quarters of the year since the year 2000.
nhill Member	Sun Jul 03 23:44:44 And if you look at closing costs (not absolute bottoms), it had the worst first two quarters since 1962 if you look at traditional metrics (closing costs) which I find to be bullshit as events happen on different time frames and don't neatly fit into "quarters". Ironically this recession does fit into quarters neatly as it's so intensely liquidity related, which naturally revolve around quarterly bonus and performance structures for hedge funds (e.g. "I'll pay it off by the end of the quarter").
Habebe Member	Mon Jul 04 09:01:18 Maybe it just seems less impactful becausemof everything else happening? It just seems from.my perspective alot of ppl predicted that the screen thing would lead to a Lehman brother moment and an eoic collapse of the chinese economy. And clearly its been sinking, but more steadily than an over night plummet. Now I havnt been following it all that closley either so maybe I missed something. When I said I had no clue, I meant it. I actually dont know what to make of this. I very much see the Chinese economy having a lost decade similar to 1990s Japan due to a handfull of issues. 1. Demographics. 2. Xi's economic policies. 3. Growth was largely fueled by a mix of catching up, cheap labor, debt and building roads to ghost cities. These are no longer what they were.
TheChildren Member	Mon Jul 04 15:20:44 accordin 2 my analysis, murica is gonna enter a lost tripcade soon (30years) similar 2 japan. da signs r all there frustrated citizens, warmongerin leaders, decayin infrastructure...officially not even in a war in uktraine but already lost 50 billion? like how? say hello to da next 30 years for us.
Habebe Member	Mon Jul 04 16:07:47 That's not like Japan at all.Maybe the Congo.
Habebe Member	Mon Jul 04 16:08:09 Korea is a Good fit.
nhill Member	Mon Jul 04 16:56:29 It's all related, they had a lot of foreign debt which is going to contribute to the liquidity crunch capital markets are experiencing. It happened around the same time as everything else so it's hard to tease it all out. Wiping out 20 billion of mostly foreign debt and will have a negative impact. The bondholders could have used that liquidity to buy assets. I agree it wasn't a Lehman brother level thing, that part was media sensationalism, but it was a serious blow that compounds with everything else (war, inflation, stimulus, rate hikes, tightening) over time to suck liquidity out of the market. 20B may seem like not very much when we've had 7 trillion paper dollars wiped out, but market caps can unwind very quickly as funds have to reduce their leverage to make up for the shortfall. It all cascades together.
Habebe Member	Sun Jul 24 17:58:54 And updates look bad for China. Halted growth. .4% Bank runs stopped by force. Government debt up. Off and on lockdowns are speeding up their decline.
TheChildren Member	Mon Jul 25 07:26:21 updates on murica looks even worse. ginormous housin bubble with complete toxic assets unpayable government debt inflation at 20% disgruntled population occupy protests stopped by force complete failre to stop covid and now pretendin it dont exists. dont worry guyz, media and press wont talk about covid no more, so it prolly means no more covid in ur country lololol get ready for lost 3 decades.
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