Trading In Kaisa Group Halted Ahead Of Debt Deadline

Mainland developers were back in the spotlight on Wednesday after the Hong Kong stock exchange announced that trading in shares of Kaisa Group Holdings had been suspended.

The suspension comes ahead of a US$400 million offshore debt deadline Kaisa faces on Tuesday.

"At the request of Kaisa Group Holdings Ltd. ("the Company") trading in the shares of the Company was halted at 9 am on Wednesday, 8 December 2021 pending the release by the Company of an announcement containing inside information," said the statement on the exchange website attributed to the chairman of the board.

Holders of bonds issued by the embattled mainland property giant, China Evergrande, are also reporting that they haven't received interest payments at the end of a 30-day grace period that expired on Monday.

The company said last week that there was no guarantee that it would have sufficient funds.

Brad Gibson from Alliance Bernstein told RTHK's Money Talk programme that a formal default now looked a certainty.

"It's inevitable and they're not alone," he said.

"We've already had about US$10 billion worth of default in the US dollar China property market and we're going to see more. At least 50 percent of the China property developers that borrow in the offshore markets are trading at distressed levels and there's a lot of refinancing that needs to occur at the beginning of next year," Gibson said.

'If the yield, or the interest, you're paying on your bond is at 20 percent, you're not going to be able to refinance." (Additional reporting by Reuters and AFP)