Author: Ma Yifan
On July 26, Powerlong Properties (01238.HK) announced that the company did not repay the principal and interest of the US$21.294 million notes before the maturity date on July 25, which was the fourth default in a week. Top 100 real estate companies.
At the same time, Powerlong Real Estate also stated that the remaining outstanding principal amount of the second batch of 2022 notes is approximately US$37.259 million and its accrued interest, which will expire on November 8, 2022, although the company continues to discuss various financing arrangements, but may not be repayable on the due date.
Powerlong Real Estate stated that it will actively maintain communication with note holders, and encourage relevant holders to contact Powerlong Real Estate as soon as practicable, so as to reach a mutually agreed arrangement on the settlement of these notes.
As of now, the default risk of real estate companies is still high.
"The default situation of real estate companies cannot be alleviated, and July will usher in the peak period of debt repayment." Ding Zuyu, CEO of E-House Enterprise Group, said at a real estate industry forum held in China Huarong earlier this month.
Before the declaration of default on overseas debts, Powerlong Real Estate had just entered the camp of 100 billion real estate enterprises.
On April 29 this year, Powerlong released its 2021 annual results. According to the data, Powerlong's annual contracted sales exceeded 100 billion yuan for the first time, reaching 101.23 billion yuan, a year-on-year increase of 24%, and its operating income was 39.90 billion yuan, a year-on-year increase of 12%. .
Compared with most of its peers, Powerlong's annual performance was not bad, so when the results were released, Powerlong's share price rose for a while, and some bond prices also rose.
However, in the first half of this year, the sales of Powerlong Real Estate, which is heavily stockpiled in the Yangtze River Delta, suffered a cliff-like decline. According to the 2021 annual report, about 71.8% of Powerlong Real Estate's projects and 67.1% of its land reserves are located in the Yangtze River Delta region, which may be affected by the epidemic. , From January to June, Baolong's contracted sales were 23.2 billion yuan, a year-on-year decrease of 56.2%, and the total contracted sales area was 1.5321 million square meters, a year-on-year decrease of 54.7%.
During the week from July 19 to July 26, 4 real estate companies have successively announced bond defaults, and Baolong is the largest one.
On July 22, Junfa Real Estate, known as the "King of Yunnan" and occupying the largest market size in Kunming, announced that the company's US$237 million senior notes due in 2022 and the interest of US$13.035 million under it will be settled in June 2022. Due and payable on January 24, but the issuer anticipates that it may not pay interest until the grace period expires, which will constitute an event of default under the notes.
On the same day, Jingrui Holdings announced that a 12% senior note will expire on July 25, 2022, and it is expected that the outstanding principal amount of the note of US$260 million and accrued interest of US$15.6 million will not be paid at maturity.
On July 19, Xinyuan Real Estate, the first Chinese real estate company listed in the United States, announced in the US stock market that a 545.3 million yuan senior note had not been fully paid.
According to CAIC data, from June to July this year, there were 200 core real estate companies in China with a total of about 175.5 billion yuan in debt due, of which private enterprises' due debt reached 117.8 billion yuan, accounting for 67%.
According to CRIC data, the financing scale of 100 typical housing companies in the first half of 2022 was 383.7 billion yuan, a year-on-year decrease of 53%.
Moody's, an international rating agency, recently stated that the default risk of Chinese developers with weak financial resources is still high, and there will be more defaults this year. The financing channels of real estate companies with a large number of overseas debts due and weak liquidity are still tight.