Sunac’s chairman and controlling shareholder, Sun Hongbin
Sunac China Holdings showed its grasp of the politics of Chinese debt over the weekend, with the top-five mainland developer reportedly making payment on a local bond less than a week after defaulting on offshore notes. Also in the news, China’s Logan Group continues to struggle with both regulatory and debt obligations and Apollo says it is upping its real estate credit business in India.
Sunac Pays Local Bondholders After Dollar Default
After warning of likely missed payments and potential defaults, Sunac China notified holders of its RMB 400 million bond that it will make an initial payment on the notes’ principal in time for the 15 May deadline following an 18-month extension, at least two unnamed noteholders told Bloomberg.
Sunac, China’s third-largest developer by contracted sales, is on the brink of defaulting on $2.2 billion of offshore bonds as it struggles to raise funds to repay the interest for at least four bond series that have due dates in May. Read more>>
Ernst & Young Resigns as Logan Group’s Auditor
Ernst & Young on 11 May stepped down as auditor for Logan Group at the request of the property developer after the Shenzhen-based developer failed to reach agreement with the accounting giant on a timeline for completing an audit of the group’s 2021 results. Taking over the auditing responsibilities are UniTax Prism (HK) CPA.
Trading of Logan Group’s shares on the Hong Kong stock exchange remains still suspended, pending the release of the company’s 2021 results. Read more>>
Logan Said Seeking to Extend Maturity of Offshore Bonds
Chinese property developer Logan Group is in talks to extend the maturities of its offshore debt amounting to hundreds of millions of dollars, several sources with knowledge of the matter told Caixin, the latest indication of distressed finances among developers as a growing number of defaults hit the debt-laden real estate sector.
If it can’t get offshore bondholders to approve the extensions, the company plans to undertake debt restructuring, the sources said. The company is seeking an extension of between four and seven years, one institutional investor said. Read more>>
Beijing Cuts Mortgage Rates to Revive Property Market
China’s central bank and the China Banking and Insurance Regulatory Commission reduced the lower limits of interest rates for first-time homebuyers to 20 basis points below the corresponding loan prime rate in an effort to revitalise the country’s property market according to an announcement over the weekend.
The 15 May notice came amid expectations that China’s gloomy housing market might continue to struggle despite the introduction of price cuts by developers and easing measures by regulators in Beijing to boost sales during the country’s Labour Day holidays this month. Read more>>
Apollo Unveils $1B Lending Plan for Indian Developers
American private equity firm Apollo Global Management Inc. is planning to lend about $1 billion to developers in India this year, betting on a recovery in the residential property market as the pandemic eases.
The allocated amount is higher than the $750 million that Apollo lent to Indian developers last year, with two-thirds of that sum directed to residential projects, according to Nipun Sahni, a partner at the private equity firm. About 70 percent of this year’s lending will go to home builders and the rest to commercial developers. Read more>>
Buyer Calls Off $23.3M Purchase of Oceanwide Hawaii Project
China Oceanwide Holdings’ December deal to sell a 19.083-acre (7.72-hectare) lot in Honolulu, Hawaii, for $23.3 million was terminated by the buyer due to undisclosed reasons. The property is part of a wider 423.726-acre residential land parcel that Oceanwide bought for $103.4 million in 2016 and agreed to sell at a $25 million loss on 16 March.
The termination comes as Oceanwide continues to face financial difficulties including the foreclosure of some of its ventures in the US as it struggles to repay its debts. Read more>>
Goodman Group Raises FY’22 Growth Forecast After Q3 Results
Goodman Group hiked its earnings-per-security forecast for the 12 months ending June 30 to 23 percent from the developer’s previous expectation from February of 20 percent growth.
The Australian industrial specialist said it has A$13.4 billion (49.25 billion) of properties under development across 89 projects as of 31 March. It also reported A$68.7 billion of total assets under management in the third quarter of its fiscal year. Read more>>
More Asians Eye US Housing Real Estate: Blackstone
Herbert Suen, senior managing director and head of Asia-Pacific at Blackstone’s private wealth solutions group, has observed an increase in Asian individuals looking to invest in alternative asset classes, particularly in private markets, in the US amid higher uncertainty in the public markets and the continued inflation and rising interest rates.
These investors intending to diversify their portfolios are drawn to the country’s broad and deep property market and the potential inflation hedges, the executive noted. Read more>>
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