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Evergrande is going Belly Up.

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1 hour ago, specinho said:

You might have mixed up the accounting info. Revenue and income might mean the same thing.

1. revenue/incomes - costs of doing business = profit or net income

- under 'costs' you may have loan repayment, operating costs, and all other expenditure that you would like to deduct in order to make the profit looks much smaller and tax rebate much larger.....

in another words, they have 507 B incomes or revenue. 300 B loans over 30 years? Which is how much?

300 B / 30 y = 10 B / y = 833 millions per month?

If it is loaned over 50 years? 500 millions per month?

there is a reason for the cash poor rich to take loans. The money from bank can be used on rolling. They teach the not so rich to do the same....... This advanced habit is putting banking system on a very high risk of insolvency throughout the world.

Refinancing might be another unintended consequence from finance easing for friends and relatives that brings disastrous impact, consciously or unconsciously, to all parties involved...........

 

2. Cayman island is a black hole enriched with resources. What are they aiming to do might be the key?

 

 

 

Revenue and income might mean the same thing.???? not when you owe 300-400 Billion US$ and your interest rate on your loans are 5 to 15 % . Right off the bat you have an easy 20 to 20 billion US$ annual cost outlay just in interest. 

 

they have a 1.5 % income/revenue ratio in 2020

2019 it was 4%

2018 it was 8%

see where they are headed to an are at now ?

300 B / 30 y = 10 B / y = 833 millions per month?   Just in principal and you are looking at 30 year loans which are not typical in the commercial lending market. Their loans are probably anywhere from 3 months to 10 years max in terms

add in the interest and now you have $4 billion a month just to service debt

 

They are insolvent. Any one can see that ....top it off no one will borrow them more money as needed to help fund day to day and no one will buy anything from them unless it is a completed unit no strings attached sale. How much of what they own is pledged as collateral? WHen you sell real estate and you have it pledged against a loan you have to satisfy the loan on the day of sale first ( you do not get to use the cash and not pay off the loan)

Face it they only had a $7 billion dollar CNY income (income  does not  mean cash flow) last year. And now they are unable to make cash interest payments to bond holders. No bank in their right mind will lend them money unless they have good saleable collateral exceeding the loan. 

 

One has to wonder how inflated their equity on the books is? Very common for developers to pump up the value of their holdings in order to borrow money. 

 

Good luck on Evergrande and the booming China economy...... Chinesse authorities are sleeping if they think they should let Evergrande fail or that their is a pile of gold in the Caymans backing up Evergrande

 

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The spillover has started. 
 

Chinese Property Developer Sinic Halts Trading After Sinking 87%

Lianting TuSeptember 19, 2021, 10:04 PM HST

Sinic Holdings Group Co. has halted trading after an 87% slump in its shares Monday afternoon. 

The Shanghai-based developer didn’t give any reason for the trading halt in Hong Kong. The sudden selloff in the last two hours leading up to the suspension was accompanied by a surge in trading volume that was about 14 times its average in the past year, according to Bloomberg-compiled data. 

China developer Sinic plunges 87% with huge volumes
 

The company has a 9.5% $246 million bond due on Oct. 18 and Fitch Ratings revised its outlook to negative last week. The Monday share plunge has slashed its market value to just under $230 million, which is tiny for a listed developer in the city. An officer at the firm’s Hong Kong office said there’s no one to attend to media inquires. 

“It’s the same story as everywhere else -- investors are concerned about the liquidity,” said Philip Tse, director and head of Hong Kong and China property research at Bocom International Holdings Co Ltd. “I think there are most likely some margin calls on some of the major shareholders” by looking at Sinic’s stock price pattern this afternoon.  

The move comes as Hong Kong’s property gauge dropped the most since May 2020 amid growing investor angst about China’s real estate crackdown and worries that Beijing may tighten grip on the city’s property sector in its “Common Prosperity” campaign. 

Risk-off sentiment in financial markets was widespread on Monday. Junk-rated Chinese dollar bonds slid by as much as 2 cents. The Hong Kong dollar fell to the lowest level this month. 

— With assistance by Natalie Lung, and Chloe Lo

 

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(edited)

HSBC, Blackrock etc have some exposure, how much is hard to tell.

What we have here is a financial crisis of historic proportions, with Chinese characteristics. 

HSBC, StanChart May Face Secondary Shockwaves From Evergrande Crisis -Analysts

Reuters

By Lawrence White and Carolyn Cohn

LONDON (Reuters) - HSBC and Standard Chartered could face spillover damage to their profits and balance sheets from the debt crisis enveloping China Evergrande Group even though the two banks say they have limited their direct exposure, analysts have warned.

Other banks and insurers could also suffer indirect effects such as loss of fees or a devaluation of their investments.

HSBC and StanChart make a big chunk of their profits in China and Hong Kong and they have been the foreign banks most involved in underwriting syndicated loans for developers there. That means they are likely to face the most immediate second-order impacts, analysts at JPMorgan said in a research report.

HSBC and Standard Chartered both declined to comment on the report.

Evergrande has left global investors guessing over whether it will make a key interest payment, adding to fears of big losses for bondholders and sending tremors through China's property sector and economy.

Hong Kong and mainland China accounted for around 84% of HSBC's profits in 2020 while Greater China and North Asia contributed 81% of StanChart's profits last year, according to a Reuters analysis of filings by the two companies - underscoring the region's importance to their overall businesses.

The two have the most direct lending exposure among foreign banks to China's property sector - $17 billion or 1.5% of group assets for HSBC and $1.3 billion or 0.5% of group loans at StanChart, according to JPMorgan.

The property sector contributes 14% of China's GDP or 25% if indirect contributions are included, JPMorgan said, and property loans are worth some 6.6% of total loans, meaning a hit to the sector could have significant wider economic impacts.

HSBC and Standard Chartered have both said they have no direct exposure to Evergrande, and that they have taken steps in recent years to carefully manage their exposures to any one sector.

HSBC has already sold all positions in its China bond or Asia credit portfolios with exposure to Evergrande, a source at the bank said.

Citing Dealogic data, JPMorgan said HSBC has been involved in underwriting 39 outstanding syndicated loans for Chinese developers while StanChart has worked on 18 such deals, which could come under pressure if there are wider property sector defaults.

In a syndicated loan banks typically underwrite the deal and then sell the debt to other investors, but may keep some of the exposure on their books.

"There is a risk that this is not an idiosyncratic event but an industry-wide problem which could result in significant spillover damage," JPMorgan said.

The U.S. bank said it estimates there could be a further 11 defaults worth some $30 billion this year across the Chinese high-yield property sector, amounting to a 23% default rate.

Other European financial firms also face a negative impact on business lines such as capital markets, asset management and private banking, said Dierk Brandenburg, head of financial institutions at ratings agency Scope.

"These will impact the profit and loss figures of Europe's globally active banks in the coming quarters, as could the ensuing regulatory crackdown by Chinese authorities," he said.

Chinese real-estate companies have tapped the public U.S. dollar bond market for $274 billion in the past five years, Scope analysts said, citing Bond Radar data, suggesting foreign banks could lose out on fees if such deals dwindle.

Insurers' investment portfolios could also be affected, said Volker Kudszus, Sector Lead for EMEA Insurance at S&P Global Ratings.

"We are not concerned by direct exposure of European insurers to Evergrande, but indirect exposure, e.g. through investments in the Chinese equity or real estate market, might see some volatility," Kudszus said.

Insurers Prudential, Ageas and Swiss Re were likely to have the most exposure to Chinese real estate, Morningstar analysts said this week.

Ageas said its Chinese joint venture company had no direct exposure to Evergrande but around 2% of the corporate bond portfolio was invested in highly-rated Chinese real estate debt.

"Only further widespread spillover to the general stock markets would have an impact on our results," an Ageas spokesperson said.

Prudential Chief Executive Mike Wells told CNBC this week that the insurer's exposure to Evergrande was "de minimis", and that less than 5% of the insurer's bond holdings were in Chinese real estate.

Prudential also has a joint venture in China.

Swiss Re did not have direct investments in Chinese property in its real estate portfolio, a spokesperson said.

(Reporting By Lawrence White and Carolyn Cohn; Editing by Catherine Evans)

 

Edited by Strangelovesurfing
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(edited)

More scary economic opinion from the conservative Mises Institute: https://mises.org/wire/evergrande-isnt-chinas-lehman-moment-it-could-be-worse

Evergrande Isn't China's "Lehman Moment." It Could Be Worse than That.

TAGS Money and Banks

09/25/2021Daniel Lacalle

The bankruptcy of the Chinese real estate company Evergrande is much more than a “Chinese Lehman.” Lehman Brothers was much more diversified than Evergrande and better capitalized. In fact, the total assets of Evergrande that are on the brink of bankruptcy outnumber the entire subprime bubble of the United States.

The problem with Evergrande is that it is not an anecdote, but a symptom of a model based on leveraged growth and seeking to inflate GDP at any cost with ghost cities, unused infrastructure, and wild construction. The indebtedness chain model of Evergrande is not uncommon in China. Many Chinese companies follow the “running to stand still” strategy of piling on ever-increasing debt to compensate for poor cash flow generation and weak margins. Many promoters get into massive debt to build a promotion that either is not sold or is left with many unsold units, then efinance that debt by adding more credit for new projects using unsaleable or already leveraged assets as collateral.

The total liabilities of Evergrande account for more than double its official debt figure (more than 2 trillion yuan). Evergrande’s financial hole is equivalent to almost a third of Russia’s GDP. Its annual revenues do not reach $70 billion, and it is more than debatable whether those revenues are real, since a relevant part comes from payment commitments whose collection is doubtful. Even if they were real, these revenues are not enough to address the bond maturities, which exceed $250 billion in the short term.

Evergrande is much more dangerous than it seems:

All the “Keynesian” solutions that you are hearing these days have already been implemented. Massive liquidity injections, low interest rates, full implicit and explicit support from the Chinese government … Let’s not forget that Evergrande was the largest issuer of commercial paper in China, $32 billion issued in 2020, a 390 percent increase from 2015, according to Reuters.

Evergrande represents less than 4 percent of the overall Chinese market but its model has been used by many Chinese promoters. The ten biggest real estate developers account for 34 percent of the market and aggressive leverage practices are widespread.

The real estate sector is huge in China. Its direct and indirect weight, according to JP Morgan, is 25 percent of GDP, more than double the size of the real estate bubble in Japan or Spain. The sector has been growing with an indebted model at 15 percent per year in the last three years. The Chinese government has introduced regulations to reduce the excess, but because it benefits from the increase in GDP and job creation, it has maintained a complacent position regarding the corporate debt model.

Chinese real estate companies, according to JP Morgan, have “reduced” their indebtedness to 92 percent of total assets from a monster 140 percent in 2018, with a profit margin of 9–13 percent. But those figures still show a larger and more concerning problem than what headlines imply. Most Chinese real estate developers have total liabilities of 50 percent to total assets, according to JP Morgan. The problem is that the value of those assets and the capacity to sell them is more than questionable.

The implications of an Evergrande collapse are far greater than what investment banks tell us.

The first risk is a domino effect in a very aggressively indebted sector. There is also a significant impact on all those banks exposed to China and emerging markets, where China has financed ruinous projects in recent years. And there is also impact on global growth and countries that export to China, because the slowdown was already more than evident. Additionally, we cannot ignore the impact on the solvency of the financial system despite billions of dollars injected
by the People's Bank of China.

A Solvency Problem Cannot Be Solved with Liquidity.

The hope that the government will fix everything contrasts with the magnitude of the financial hole. Be that as it may, we cannot overlook the negative effect on those sectors highly exposed to real estate growth, infrastructure, electricity, services, and in the hundreds of thousands of citizens who have paid an upfront fee for flats that are not going to be built.

The problem with China is that the entire economy is a huge indebted model that needs almost ten units of debt to generate one unit of GDP, three times more than a decade ago, and all this catastrophe was already more than evident months ago. With total debt of 300 percent debt to GDP according to the Institute of International Finance, China is not the strong economy swimming in with cash that it was a couple of decades ago.

The market assumed that because it is China, the government was going to hide these risks. Even worse, the Evergrande collapse only shows a dangerous reality in several Chinese sectors: excessive indebtedness without real income or assets to support it.

This episode comes at the worst possible time, after the government has launched a massive crackdown on large companies. International investors are already concerned about corporate governance and intervention in China and now the fears of credit contagion make the risk even worse.

Evergrande is not an anecdote, it is a symptom.

Author:

Daniel Lacalle

Daniel Lacalle, PhD, economist and fund manager, is the author of the bestselling books Freedom or Equality (2020), Escape from the Central Bank Trap (2017), The Energy World Is Flat (2015), and Life in the Financial Markets (2014).

He is a professor of global economy at IE Business School in Madrid.

Creative Commons Licence
 
 
Edited by ronwagn
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On 9/21/2021 at 10:47 PM, frankfurter said:

agree. Alaska is an option. Partition Alaska and sell it to Canada, Russia, China.

In prior posts, ronwagn has disclosed his daily dose of meds is very heavy. He admits he would not survive without them.

😀

I am very healthy without any meds whatsoever. Your comment is out of bounds. Don't make comments about others health that are lies or distort whatever is said about anything. If you can't tell the truth stay offline!

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Besides, what’s wrong with meds? The bottom floor of the food pyramid is more dangerous. You can just look at Trump and Biden and tell they eat to many carbs and to much sugar. Lol Alcohol and breaded fried shyt is the US national past time only beat out by saying we need freedom and less tyranny so we can eat and drink more unhealthy shyt and throw these fat unhealthy people on the healthcare system so I can pay for it. Against big government my as.. Big medical is a legacy cost. 

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I just hope Evergrande doesn’t mess with tV production. When my 60” dies I wanna go for 85”. America can’t do that cheap enough. 

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(edited)

The government has no concern for healthcare or its costs. Corporations run the regulation, yep, including Trump and Biden. This is my version of conspiracy/you know, deep state and all. Dallas Mavericks owner Mark Cuban says he can make generics for at least 100 drugs and charge 15% over cost and still make a lot of money. He says he could charge more but wants to disrupt the legal drug world. Is this the Musk effect at work? Anyhow do a Google and wish him luck. 

Edited by Boat
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2 hours ago, Boat said:

I just hope Evergrande doesn’t mess with tV production. When my 60” dies I wanna go for 85”. America can’t do that cheap enough. 

Going that big, I would investigate projectors instead of flat screens.

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On 9/27/2021 at 2:21 AM, notsonice said:

 

They are insolvent. ......... How much of what they own is pledged as collateral?

Face it they only had a $7 billion dollar CNY income (income  does not  mean cash flow) last year. And now they are unable to make cash interest payments to bond holders. No bank in their right mind will lend them money unless they have good saleable collateral exceeding the loan.

Good luck on Evergrande and the booming China economy...... Chinesse authorities are sleeping if they think they should let Evergrande fail or that their is a pile of gold in the Caymans backing up Evergrande

 

mm....... Imagine you are a parent watching a very big bungalow down the road, owned by someone else, devoured by fire. What does it cost you?  Chinese authorities can be the parent mentioned. What does it cost? The worst might be a reformation that is much needed.

Every historical crisis brings changes. Sometimes for better, sometimes worse. The outcomes usually  depend on who is leading or are involved; if they are foresighters/ revolutionists, or merely copycats.

Majority of mankind is selfish and generally indifference. Only a handful can be truly altruistic in a single society...... These few are mainly elder generations who founded their wealth with bare hands, sweat, tears, hardship and more........

 

2. As mentioned somewhere, bond is a silly method based on goodwill and friendship. You buy off someone's debts in a hope to get paid interest per year, yes....?? It literally means you give a lot of cash to your friend, not expecting him to pay, except spare changes in interest rate per month. And may be some collateral when, and if,  the friend and company wrapped up neatly?

The public buy into bonds believing they would be paid consistent high interest?? From who? Banks? Then, it would be the banks who need to pay them interest and refund the money shall they want to sell the bond, not the company itself?? Banks are in big trouble??

 

3. bank loan and collateral with Evergrande

I am not familiar but vaguely how loan is done for real estate players and companies might be this:

You show them your assets including market value of all properties, cash/incomes, etc and liabilities e.g. loan, expenditure, and other things in need of payment. If it is money you want to borrow, you will need to mortgage a near equal value of asset. If it is an item you want to buy, the item itself would be the collateral.

Therefore, how much collateral might depend on what is mortgaged?? Or what is exchanged between the duo?

 

In a nutshell, the worst scenario it could bring is a reformation much needed by China. Undesirable impact might be on socio- economy that would be handful to tackle........

image.png.db0f97d864d18d2ae62837a266b50bec.png

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(edited)

2 hours ago, specinho said:

mm....... Imagine you are a parent watching a very big bungalow down the road, owned by someone else, devoured by fire. What does it cost you?  Chinese authorities can be the parent mentioned. What does it cost? The worst might be a reformation that is much needed.

Every historical crisis brings changes. Sometimes for better, sometimes worse. The outcomes usually  depend on who is leading or are involved; if they are foresighters/ revolutionists, or merely copycats.

Majority of mankind is selfish and generally indifference. Only a handful can be truly altruistic in a single society...... These few are mainly elder generations who founded their wealth with bare hands, sweat, tears, hardship and more........

 

2. As mentioned somewhere, bond is a silly method based on goodwill and friendship. You buy off someone's debts in a hope to get paid interest per year, yes....?? It literally means you give a lot of cash to your friend, not expecting him to pay, except spare changes in interest rate per month. And may be some collateral when, and if,  the friend and company wrapped up neatly?

The public buy into bonds believing they would be paid consistent high interest?? From who? Banks? Then, it would be the banks who need to pay them interest and refund the money shall they want to sell the bond, not the company itself?? Banks are in big trouble??

 

3. bank loan and collateral with Evergrande

I am not familiar but vaguely how loan is done for real estate players and companies might be this:

You show them your assets including market value of all properties, cash/incomes, etc and liabilities e.g. loan, expenditure, and other things in need of payment. If it is money you want to borrow, you will need to mortgage a near equal value of asset. If it is an item you want to buy, the item itself would be the collateral.

Therefore, how much collateral might depend on what is mortgaged?? Or what is exchanged between the duo?

 

In a nutshell, the worst scenario it could bring is a reformation much needed by China. Undesirable impact might be on socio- economy that would be handful to tackle........

image.png.db0f97d864d18d2ae62837a266b50bec.png

bond is a silly method based on goodwill and friendship????

 

the bond market is not based on goodwill and friendship.... a collapse of the junk bond market in China will not serve China or the rest of the world very well. INterest rates in the junk bond market for all bonds in China are nearly double that they were 6 months ago......severely restricting the market.

In a nutshell, the worst scenario it could bring is a reformation much needed by China????

recessions are never wanted and never a good way to bring reformation. Recessions hurt many that have nothing to do with  failures in the markets..... Real Estate bubble in China is imploding right now and with 30 percent of the Chinese  economy relying on a smoothly functioning real estate market the spill over into the rest of the markets and across the globe is a worst case scenario. 

Good luck...... Sailors take warning

 

Edited by notsonice
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(edited)

Evergrande missed the USD interest payment of 83 million last Thu and another 50 million is due today. 

Even with the debts nominated in Yuan, many of them are from employees who were forced to borrow from savings, friends and family so I don't think there will be productivity, the employees moral would be low to continue to work for them with the uncertainty.

And the debt from the houses sold on paper which may not be completed in the future may not be counted in their Yuan debt yet.

The one will get the biggest hit is the HSBC as they make enemies in the past and got no helping from central/federal banks unlike Black Rock (although people withdraw from this fund as a record level last week). 

Funny enough there would be risk in stable coins as well, especially USDT Tether. Who knows which commercial papers they are holding for backing up this coin and this may lead to a huge shock to crypto market (crypto has FUD regularly  so this would be in  "The Boy Who Cried Wolf" category).

----------

Sugar is the new drug although it is the most needed in crisis time like in wars or famine, which normal people in Western Countries don't have it often nowadays. On top of the doctor giving drugs rather than concentrate on solving the patient obesity problems. The med industry is all about the profits. Imaging many pharmacy corps, clinics and insurance will lose profit if US people are healthier. 

Welfare and medical care was raised in the economy booming time and with the aging population, along side with economy crisis and slow down  through out developed countries, it is harder for the youngsters to accumulate wealth while they are paying more taxes (corporation can pass their tax to the consumer and the rich, including politicians, Hollywood has many ways to avoid tax so the working middle class and small business owners, consumers are the one who shoulder them).

It is not always about the obesity because sugar/alcohol is a drug to release temporarily stress and it affects the poor people rather than the rich because of the processed food. This trend is now increasing in the poor and developing countries as well, even in poor African countries.

With the same number of lab tests for annual check up, the hospital charged US visitor cheaper than they bill the insurance with Medicare. Average group home cost 347 usd per person per day.

More student loan support from Federal Gov helped University inflate their tuitions fees and the youngster who will be graduated in tough time will have to be in debt more which would affect their wealth accumulation, and therefor the rise of Socialism in the US and the Western World.

On top of that more delusional on green energy with very low energy density and need more cost spent on a longer supply chains, more maintenance and more wastes, which lead to more energy demand, on top of the pollutions that is much more dangerous and harder to recycle than CO2.

As an immigrant I have nothing to complain, as my alternatives are worse,  but this is the view of many native born young people aka gen Z  in US, Japan, Germany, UK, France, NZ, Australia, Canada, or with family that need any kind of welfare ..  Tough time, with heavy debts make people tends to believe the left wing politicians. We can see this trend in US, Germany and Japan recent election. I have a very negative view about the world economies in next 10 years, I predict stagnation like Japan last 30 years,  but well, life is all about hope. 

Edited by SUZNV
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(edited)

Don't think for a second the fiasco is settled. Here we have Fantasia Holdings Group Co., who have apparently decided not to pay their bills, even though they can.

Evergrande is dead broke, Fantasia supposedly isn't, they just threw up the middle finger to foreign creditors like they just don't care. Beware this precedent, Xi has allowed open season on foreign investors  to begin.

This won't stop with the real-estate sector.

The Fantasia Chapter of the Evergrande Saga Is a Pandora’s Box

How a small player has begun the nasty denouement of China’s property developer crisis.

Shuli RenOctober 6, 2021, 9:03 AM HST
Thinking outside the wrong kind of box.

Thinking outside the wrong kind of box.

Photographer: Hulton Archive/Hulton Archive

Until this week, no one cared about Fantasia Holdings Group Co., a smallish developer that ranks only 64th in China’s vast real estate industry. Fantasia’s revenue is not even one-tenth that of China Evergrande Group, which is near the brink of a collapse; its $12.9 billion debt is a fraction of Evergrande’s $300-billion-plus obligations. Yet Fantasia’s failure to make a $206 million dollar-denominated bond payment on Oct. 4 sent the markets tumbling. Chinese high-yield dollar-denominated bonds witnessed their biggest selloff in at least eight years. What did Fantasia do to create this havoc?

Fantasia could have repaid the note but chose not to. As a result, it opened a Pandora’s Box of financial nastiness. 

In theory, Fantasia should have enough cash on its books to cough up the $206 million — unlike Evergrande, which is suffering a major liquidity crisis. As of the end of June, the smaller developer sat on 27 billion yuan ($4.2 billion). In late August, the company claimed it had about 10 billion yuan in cash in the holding company level, according to an investor present at the conference call. In early September, it repurchased $6 million worth of bonds, claiming “good liquidity” after the open market operations.

Fantasia has also had some success divesting assets. Last week, Country Garden Services Holdings Co, owned by China’s largest developer, agreed to buy its property management unit for 3.3 billion yuan. At that stage, Fantasia’s ability to repay this month was never in doubt.

The day it squirmed out of the $206 million, the company tore up another contract. For the Country Garden acquisition deal, Fantasia had received a short-term bridge loan worth 700 million yuan on Sept. 30. It had the money, but decided not to repay it on Monday when it was due.

Final Fantasy?

Fantasia's $300 million dollar bond due this December tumbled after the developer failed to repay notes due this week. 

Source: Bloomberg

So is there some method to Fantasia’s madness? From a strategic viewpoint, the company is playing a good game. A series of top-down government policies to rein in debt and control prices have turned property development into a money-losing business. With no hope of economic recovery, Fantasia has no incentive to honor its bond obligations. As of 2020 year-end, dollar-denominated bonds accounted for 62% of the company’s total debt. By getting out of all of them, Fantasia satisfies Beijing’s edict against crossing the “three red lines” — against excessive corporate debt — with relative ease. Late Wednesday, Fantasia told investors it had begun meeting with financial advisors to discuss “the next step.”

By breaking the honor code of bond issuance, Fantasia is forcing investors in other developers to consider selling all their holdings. It is closing the refinancing window for the other companies in the sector. Everyone will be in the same boat.As it is, hundreds of developers are racing for more funds to remain liquid. And, size is no guarantee of survival: Big as Evergrande is, it had only 4% market share last year.

It’s just like Squid Game, the Netflix Inc. series I’m obsessed with, if you remember my previous column. The start of the Korean dystopian drama is relatively civil: The players are just trying to get to the finish line before time runs out. But then the drama intensifies and things get cutthroat and gruesome. It’s grim but entertaining.

China’s developer drama is now at that point. Make sure you have enough popcorn. 

(Updates 6th paragraph with Fantasia’s comments to investors.)

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Edited by Strangelovesurfing

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