Latest news with #Bloomberg-compiled
Mint
2 days ago
- Business
- Mint
Hong Kong Builder Emperor Revises Debt Plan, Seeks Loan Extensions
(Bloomberg) -- Hong Kong's property slump is weighing on a range of local developers, with a well-known but smaller-scale builder the latest to seek relief from creditors. Emperor International Holdings Ltd. has sent a revised debt restructuring proposal to some lenders in recent days, seeking to extend the maturity of its bank borrowings to Dec. 31, 2027, according to people familiar with the matter. The company earlier reported that it had HK$16.6 billion ($2.1 billion) in overdue bank loans, breaching certain terms on the facility agreements. Banks with a majority interest in Emperor's loans have formed a coordination committee to negotiate restructuring terms with the company, the people said, asking not to be identified discussing private matters. No agreement has been reached so far despite months of talks, they added. Emperor International is the property arm of conglomerate Emperor Group, known for its luxury watch business and its entertainment unit, which manages a stable of local celebrities, including Nicholas Tse and Joey Yung, according to its website. The company's debt woes reflect the widespread impact of Hong Kong's years-long property slump, which has left real estate giants such as New World Development Co. and smaller firms like Emperor and Grand Ming Group Holdings Ltd. struggling to stay afloat. Property prices in the city have plummeted by around 30% over the past four years, reaching a nine-year low as banks have tightened credit lines, according to Bloomberg-compiled data. Property developers are navigating industry-wide pressure and Emperor International is no exception, but continues to operate as usual, with constructive negotiations underway for some time with banks to amend terms, and normal financial procedures are currently being processed, the company said in an emailed statement in response to a Bloomberg inquiry about its debt talks. The company also said that it maintains a healthy balance sheet position. The latest revision came after banks rejected an earlier proposal the company sent in March, the people added. Under the previous plan, Emperor had sought a three-year extension on the borrowings and offered second-lien mortgages on some of its commercial real estate in Hong Kong as a credit enhancement, the people said. Emperor, which owns residential properties and office towers in Hong Kong, Beijing and overseas, also offered about HK$77 million in fresh funding to service debt repayment in its earlier proposal, but banks demanded more upfront funds, the people added. The developer has missed interest payments on some loans since last year, people familiar with the matter said. Emperor said in June that it was negotiating with banks on a restructuring plan. As of March 31, 2025, Emperor had net current liabilities of HK$13.08 billion, versus cash, bank balances and bank deposits of HK$639.6 million, according to its most recent annual results. The company has a market capitalization of HK$1.13 billion, according to Bloomberg-compiled data. More stories like this are available on
Business Times
4 days ago
- Business
- Business Times
Chinese convertible bonds rally to decade-high on surging demand
[BEIJING] Convertible bonds have emerged as one of the most popular asset classes in China this year, trouncing the performance of local stocks and fixed income. The CSI convertible bond index has rallied about 8 per cent in 2025 to trade near a decade high. That easily beats the stock benchmark's 2.1 per cent advance so far this year, while Chinese government bonds have returned just 0.9 per cent in local-currency terms. Investor appetite for the hybrid notes has surged, thanks to easing credit rating risks on the securities and an equity market rebound. A share price rally in banks and small-caps, the sectors that dominate the convertible bond index, has further buoyed demand for such securities that can be exchanged for equity. 'Non-convertible bond investors can no longer overlook the standout performance of this asset class,' said Wesley Chen, head of fixed income at Ubp Investment Management Shanghai. 'For foreign funds looking to build positions in China but lacking strong conviction in the equity market, these bonds offer a compelling alternative, providing exposure to equity upside with lower volatility and drawdowns.' Convertibles typically offer investors lower yields than conventional debt, but provide an option to exchange into shares if certain conditions are met. The recent economic backdrop has made such notes appealing to both issuers, who can raise funds at a lower cost, and buyers, who expect stock momentum to continue. Two exchange-traded funds tracking the CSI convertible bond index saw the biggest monthly inflow last month since January, Bloomberg-compiled data show. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up A drop in supply from early redemptions and maturities has also supported prices. The outstanding amount of such securities in China fell by over 55 billion yuan (S$9.9 billion) in the June quarter to dip below 650 billion yuan, according to Sinolink Securities. That compares with over 730 billion yuan at the end of 2024. The supply squeeze has been particularly pronounced in banking convertibles, long favoured by investors for their low volatility, strong credit ratings and better liquidity. The surge in the sector's shares has helped fuel early redemptions. The CSI 300 Bank Index has gained 17 per cent this year. To some, the rally presents an opportune time to realise gains. Convertible bond investors should 'consider locking in some profits', given uncertainties facing the stock market from tariff negotiations and earnings, Ruizhe Yin, a Sinolink Securities analyst, wrote in a note. Yet the tight supply will likely continue to support the price of convertibles. There has been no new bank convertible issuance onshore since late 2022, according to data compiled by Bloomberg. Shanghai Pudong Development Bank's 50 billion yuan note, which matures in October, will likely exacerbate the situation. 'Market appetite is strong, but supply is tight,' said Wei Li, head of multi-asset investments at BNP Paribas Securities (China). 'Chinese bank convertibles are trading like premium scarcity plays, yet visibility on future issuance remains low. That's keeping valuations elevated.' BLOOMBERG
Mint
4 days ago
- Business
- Mint
Chinese Convertible Bonds Rally to Decade-High on Surging Demand
(Bloomberg) -- Convertible bonds have emerged as one of the most popular asset classes in China this year, trouncing the performance of local stocks and fixed income. The CSI convertible bond index has rallied about 8% in 2025 to trade near a decade high. That easily beats the stock benchmark's 2.1% advance so far this year, while Chinese government bonds have returned just 0.9% in local-currency terms. Investor appetite for the hybrid notes has surged, thanks to easing credit rating risks on the securities and an equity market rebound. A share price rally in banks and small-caps — the sectors that dominate the convertible bond index — has further buoyed demand for such securities that can be exchanged for equity. 'Non-convertible bond investors can no longer overlook the standout performance of this asset class,' said Wesley Chen, head of fixed income at Ubp Investment Management Shanghai Ltd. 'For foreign funds looking to build positions in China but lacking strong conviction in the equity market, these bonds offer a compelling alternative, providing exposure to equity upside with lower volatility and drawdowns.' Convertibles typically offer investors lower yields than conventional debt, but provide an option to exchange into shares if certain conditions are met. The recent economic backdrop has made such notes appealing to both issuers — who can raise funds at a lower cost — and buyers, who expect stock momentum to continue. Two exchanged-traded funds tracking the CSI convertible bond index saw the biggest monthly inflow last month since January, Bloomberg-compiled data show. A drop in supply from early redemptions and maturities has also supported prices. The outstanding amount of such securities in China fell by over 55 billion in yuan ($7.7 billion) in the June quarter to dip below 650 billion yuan, according to Sinolink Securities Co. That compares with over 730 billion yuan at the end of 2024. The supply squeeze has been particularly pronounced in banking convertibles, long favored by investors for their low volatility, strong credit ratings and better liquidity. The surge in the sector's shares has helped fuel early redemptions. The CSI 300 Bank Index has gained 17% this year. To some, the rally presents an opportune time to realize gains. Convertible bond investors should 'consider locking in some profits,' given uncertainties facing the stock market from tariff negotiations and earnings, Ruizhe Yin, a Sinolink Securities analyst, wrote in a note. Yet the tight supply will likely continue to support the price of convertibles. There has been no new bank convertible issuance onshore since late 2022, according to data complied by Bloomberg. Shanghai Pudong Development Bank Co.'s 50 billion yuan note, which matures in October, will likely exacerbate the situation. 'Market appetite is strong, but supply is tight,' said Wei Li, head of multi-asset investments at BNP Paribas Securities (China). 'Chinese bank convertibles are trading like premium scarcity plays, yet visibility on future issuance remains low. That's keeping valuations elevated.' More stories like this are available on
Mint
5 days ago
- Business
- Mint
China Bond ETFs Draw Strong Inflows as Investors Seek Safety
Some of China's largest exchange-traded funds tracking long-term bonds have seen their biggest inflows in months, reflecting growing investor demand for safer assets even as signs of economic resilience emerge. The Bosera SSE 30-Year China Treasury Bond ETF has generated record inflows of around around 700 million yuan in each of the past two sessions, according to Bloomberg-compiled data, bringing its market capitalization to more than 9 billion yuan. The Pengyang ChinaBond 30-year Treasury Bond ETF, whose fund is double that size, attracted an inflow of 1.1 billion yuan on Monday, the most since March. In another sign of appetite for sovereign debt, futures on 30-year Chinese government bonds jumped as much as 0.5% Tuesday, the most since May 30. The move followed China's release of a mixed set of economic data, including higher-than-expected gross domestic product in the second quarter, June retail sales that came below estimates, and a continued contraction in property investments. The rising interest in long-term bonds in China is a contrast to the turmoil in developed markets, where ultra-long bonds have been rocked by rising fears that governments are spending more than they can afford. The surge in demand for the ETFs underscores investors' broad bullishness for China's bond market even as equities rebound, amid bets that the People's Bank of China will support an economy facing potential export headwinds. At a Monday press briefing, central bank officials again vowed to maintain a moderately loose monetary policy and struck a measured tone on risks tied to banks' purchases of government bonds. 'We expect China's GDP will decelerate in the second half of the year and local rates will be falling more quickly with deflationary pressure likely to deepen,' said Becky Liu, head of China macro strategy at Standard Chartered Bank. READ: Xi Urges 'New Model' for China Urban Plan in Rare Meeting China's 10-year government bond yields could fall to 1.3% by year-end versus the current level of around 1.66%, Liu said, presuming the PBOC will keep liquidity loose and further roll out monetary easing measures. This article was generated from an automated news agency feed without modifications to text.
Yahoo
05-07-2025
- Business
- Yahoo
The Securities That Banks Are Backing Away From: Credit Weekly
(Bloomberg) -- US banks, among the few companies that still sell preferred shares, are following JPMorgan Chase & Co.'s lead and retreating from the securities, even as investors are eager to buy them. Foreign Buyers Swoop on Cape Town Homes, Pricing Out Locals Trump's Gilded Design Style May Be Gaudy. But Don't Call it 'Rococo.' Massachusetts to Follow NYC in Making Landlords Pay Broker Fees NYC Commutes Resume After Midtown Bus Terminal Crash Chaos What Gothenburg Got Out of Congestion Pricing Capital One Financial Corp. redeemed a $500 million preferred share this week, resulting in the market shrinking on a net basis this year, according to data compiled by Bloomberg. If the trend continues, this will be the second year in a row that the market for US bank preferreds has shrunk, something that hasn't happened since the lenders were replacing obsolete capital after the global financial crisis. At the same time, preferred managers have received more cash to invest this year, as investors pile into higher-yielding assets that can perform well when rates are cut. Assets under management in the 10 largest funds in the space have risen by more than 10% on average year-to-date, based on Bloomberg-compiled data. Capital One's redemption follows JPMorgan cutting its preferreds outstanding by more than a quarter last year. Banks are broadly paying off the securities because they don't need as many of them anymore: capital regulations that made preferred shares attractive to issue, including the Basel III endgame rules, are being eased now in the US. The securities are expensive for banks, because they pay relatively high dividends. But banks were among the few companies still selling preferred equities, a sort of equity with some debt-like characteristics, that helped finance the industrialization of America. For earlier generations of investors, the securities were an attractive source of income, offering more than a company's notes would pay, but also coming with more risk. If the company fell on hard times, preferreds were close to the back of the line to be repaid, for instance. Non-financial companies have been backing away from preferreds, in favor of securities known as 'hybrid bonds.' Hybrids are among the last bonds to be repaid if a company runs into trouble, but aren't as far back in line as preferreds, which are equity. Issuance became viable for companies once Moody's Ratings changed its methodology in early 2024 and the securities quickly became one of the hottest sources of capital-raising in the US. With preferreds growing less popular, the managers of the largest preferred-focused funds are looking for alternatives. They are banking on the relatively high leeway they have to invest in securities similar to preferreds, such as hybrid bonds. 'That's the nice thing about our universe. When people talk about preferred securities, the definition is very grey,' said Douglas Baker, head of preferred securities at Nuveen. 'If things get tight in one area, we typically have plenty of places to pivot to,' he said. It's a view shared by Mark Lieb, founder and CEO of Spectrum Asset Management and a veteran of the preferred market, who expects the supply of hybrids from US utilities to expand in order to cover the growing demand for infrastructure investments supporting AI. That growth can outweigh any loss of issuance from US banks, as their regulatory needs keep decreasing. 'We will have to see what the final rules and regulations are but on the utility side it's going to more than offset it,' Lieb said in an interview. 'Capex is going to go up.' Non-financial corporates in the US sold about $30 billion of hybrids last year, with another $10 billion sold so far in 2025, data compiled by Bloomberg shows. This far exceeded what was repaid through the exercise of call options. Week In Review JPMorgan Chase & Co. helped Warner Bros. Discovery Inc. restructure its debt by offering creditors a deal that would leave them with billions less than they were owed, despite the notes having an investment-grade rating. A trio of banks joined Morgan Stanley in a $5 billion debt deal for xAI Corp., after the company requested their participation to maintain relationships that could help with financings down the line. New World Development Co. closed a record $11 billion refinancing deal, averting a potential crisis in Hong Kong's fragile property market. SoftBank Group Corp. sold $4.2 billion of bonds in dollars and euros, as the technology investment firm turns to global debt markets to accelerate its artificial intelligence push. JPMorgan Chase & Co. and UBS Group AG are among a group of Wall Street banks sounding out investors ahead of a mid-July launch for a $4.25 billion debt package backing Sycamore Partners' buyout of UK pharmacy Boots. The European Central Bank held onto two bonds of embattled payments company Worldline SA while prices slumped after news reports alleging the company covered up fraud by some of its customers. Goldman Sachs Group Inc. is leading a potential transaction for Gray Media Inc. to help the company refinance some of its existing debt, aiming to raise at least $750 million in the high-yield bond market. Flora Food Group BV is the first issuer in Europe rated one of the lowest levels of junk to sell bonds in nearly a year, a sign of investors' insatiable appetite for risk. Vodafone Group Plc pulled in multi-billion investor bids across a multi-currency debt sale, the proceeds of which will be used to finance a sweeping €2 billion ($2.35 billion) debt buyback. Wolfspeed Inc., a chipmaker caught in President Donald Trump's push to reshape Biden-era tech subsidies, filed for bankruptcy to enact a creditor-backed plan to slash $4.6 billion in debt. AMC Entertainment Holdings Inc. said it reached an agreement with creditors to end litigation that resulted from the movie theater chain's debt restructuring last year. Merit Street Media, the startup founded by celebrity psychologist Phil McGraw, filed for bankruptcy in Texas. On the Move Josh Harris' 26North Partners is hiring bankers from JPMorgan Chase & Co. and Deutsche Bank AG as it continues to grow its investment-grade bets. The platform has tapped Todd Marr, formerly global head of debt private placements at JPMorgan, and Ravi Suresh, former head of insurance private asset solutions at Deutsche. BNP Paribas hired Denise Chow from Morgan Stanley's leveraged finance team, one in a string of recent moves across lenders' debt capital markets desks. Uros Stosic, a longtime leveraged loan trader, left Morgan Stanley to join Truist Financial Corp.'s team in New York as a managing director. He reports to Eddie Ferguson, head of loan and sales trading. SNAP Cuts in Big Tax Bill Will Hit a Lot of Trump Voters Too For Brazil's Criminals, Coffee Beans Are the Target America's Top Consumer-Sentiment Economist Is Worried Sperm Freezing Is a New Hot Market for Startups Pistachios Are Everywhere Right Now, Not Just in Dubai Chocolate ©2025 Bloomberg L.P.
