https://www.cnbc.com/2021/09/15/china-evergrande-debt-crisis-bond-default-risks-for-investors.html
Foreign investors are probably the last priority
Foreign investors holding Evergrande bonds are “definitely sweating,” Kong said.
The government is clear on its goal of maintaining social stability, and that means putting home buyers first, according to the portfolio manager.
“The first thing you want to do is to provide … enough confidence … provide liquidity, so that they can deliver those homes, to those people who put in the down payments,” Kong said.
Mom-and-pop investors will probably be the second priority, she said, referring to less experienced retail investors.
“Whereas offshore investors, look, they’re institutional investors who actually should understand these risks. So I think that a lot of these investors should be looking at some type of amend and extend, meaning that they may have to take a haircut on their principal or, see their coupon being paid at a much later date,” Kong said. A coupon is annual interest paid out for a bond.
Evergrande has six bonds maturing next year, and 10 in 2023, of a total of 24 bonds it has issued, according to Refinitiv Eikon data. Its bonds are also included in various Asian high-yield indexes.
Evergrande stocks have plummeted nearly 80% this year, and its bonds have also tumbled.
In Hong Kong, China Evergrande Group’s stock plunged 11.87% after the embattled property developer on Tuesday flagged expectations for a “significant continuing decline in contract sales in September,” as confidence falls following negative media reports surrounding the firm.
Shares of China Evergrande New Energy Vehicle and Evergrande Property Services, units that Evergrande has been attempting to sell, also plummeted 24.66% and 12.01% respectively. Evergrande Group said Tuesday that it was “uncertain” whether it will be able to make any such sale.
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