China's Largest Property Developer Misses Its First Bond Payment, While Another Heads To Court With Creditors Next Week
Portfolio Pulse from Daniel Harrison
China's largest property developers, Country Garden Holdings Limited and China Evergrande Group, are facing financial difficulties. Country Garden missed a bond payment of $15.4 million and has $186 billion of liabilities. Its junk bonds are trading at around 4 cents on the dollar. Evergrande, with $327 billion in liabilities, faces liquidation at the end of the month. The situation is affecting the Chinese property market and the performance of China tracker funds such as the iShares China Large-Cap, which is down 10% year-to-date.
October 18, 2023 | 2:14 pm
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POSITIVE IMPACT
The S&P 500 ETF Trust is up 14.5% year-to-date.
The S&P 500 ETF Trust is performing well, indicating a positive financial outlook.
CONFIDENCE 90
IMPORTANCE 60
RELEVANCE 60
NEGATIVE IMPACT
Country Garden missed a bond payment and its junk bonds are trading at around 4 cents on the dollar.
The missed bond payment and the low trading value of its junk bonds indicate a severe financial crisis for Country Garden.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100
NEGATIVE IMPACT
Evergrande, with $327 billion in liabilities, faces liquidation at the end of the month.
The high amount of liabilities and the upcoming court hearing indicate a severe financial crisis for Evergrande.
CONFIDENCE 100
IMPORTANCE 100
RELEVANCE 100
NEGATIVE IMPACT
The iShares China Large-Cap is down 10% year-to-date due to the crisis in the Chinese property market.
The financial crisis in the Chinese property market is negatively affecting the performance of the iShares China Large-Cap.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 80
NEGATIVE IMPACT
JP Morgan analyst predicts a series of defaults on Country Garden's offshore bonds.
The prediction of defaults on Country Garden's offshore bonds by a JP Morgan analyst indicates potential financial risks.
CONFIDENCE 90
IMPORTANCE 60
RELEVANCE 60
NEGATIVE IMPACT
Longfor Group Holdings Limited’s 2027 3.375% dollar bonds and its 3.85% 2032 dollar bonds have plunged 25% and 30%, respectively.
The significant drop in the value of Longfor Group's bonds indicates financial difficulties.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 80
NEGATIVE IMPACT
Bonds of Seazen Group Ltd. dropped 16% in value.
The drop in the value of Seazen Group's bonds indicates financial difficulties.
CONFIDENCE 90
IMPORTANCE 80
RELEVANCE 80