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Real estate giant China Evergrande will be liquidated

nytimes.com

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Re: Real estate giant China Evergrande will be liquidated

#171

Post by wesapien »

onlyrealcuzzo wrote: post #64
berserk1010 wrote: post #49

A couple of things to note: 1.) Why did it take Evergrande 3 years to liquidate? In western countries, liquidation happens in a few months. One should note that Evergrande did not get that big by itself; obviously it had the support of CCP elites to secure huge bank loans. Therefore, when it went bankrupt, the delay was to allow these elites to pull money/liquidable assets out of Evergrande. Thus after 3 years, Everg…

> This bodes very ill for creditors. Foreign creditors account only for $25B of the $300B liabilities for Evergrande. I'm sorry - but any foreigner who lent Evergrande money thinking this wasn't a huge risk is a moron. > This will accelerate the real estate price decline in all parts of China, on top of the 30-40% drop we're seeing in Tier 1 cities, on top of the 50-60% drop we're seeing in non-Tier 1 cities. Accordi…

Nice stats but people want housing condition to improve not degenerate to other countries lows. Should we thank our western overlords for sparing us from those conditions? No.

Re: Real estate giant China Evergrande will be liquidated

#172

Post by seanmcdirmid »

onlyrealcuzzo wrote: post #126
seanmcdirmid wrote: post #115

Earlier quoted context omitted.

Is HZ really considered a T1 city now? It is more like a rich T2 city.

According to Wikipedia it is a "New Tier 1" city. T1 is still just Shanghai, Beijing and Shenzhen/Guangzhou.

I guess by money it could be, so could other cities in jiangsu and zhejiang that are China’s richest provinces.

Re: Real estate giant China Evergrande will be liquidated

#173

Post by hmm37 »

berserk1010 wrote: post #168
hmm37 wrote: post #161

Earlier quoted context omitted.

Equities are different from bonds. Bonds are being snapped up by a lot of foreign investors.

Chinese equities suffered a US$3.4 billion outflow from non-resident portfolios in the last month of 2023, while Chinese bonds only had a marginal US$189 million inflow for the same month, according to preliminary data from the Institute of International Finance (IIF) released on Thursday. https://www.scmp.com/economy/china-economy/article/3248078/c... That said, once foreign bond buyers realize how much foreign cred…

There most be different data sets or different measurements, or categories of bonds being used. E.g. https://www.bloomberg.com/news/articles/2024-01-16/china-bon...

"Global investors raised their holdings of Chinese bonds for a fourth straight month, capitalizing on a lucrative currency swap strategy to continue their gradual return to the world’s second-biggest debt market.

They bought 181 billion yuan ($25 billion) of local yuan bonds on a net basis in the country’s main interbank market in December, taking their total holdings to the highest since April 2022, show Bloomberg calculations based on clearing house data."

All of this is besides the point that foreigners are buying China's bonds, as @loeg has stated. They are essentially swapping out riskier equities for the safety of bonds which is by and large what is often taught to do when the economy isn't booming, only to switch back into equities when the downward cycle is over.

Re: Real estate giant China Evergrande will be liquidated

#174

Post by cdf »

yorwba wrote: post #124
berserk1010 wrote: post #92

Earlier quoted context omitted.

I'll paste one sample, it's safer 1、恒大，龙头房企，负债规模约2.6万亿，2021年9月正式宣告暴雷。 2、中梁，浙江房企，负债规模约2000亿，2022年4月公告美元债寻求展期，宣告暴雷。 3、俊发，云南房企，负债规模约1200亿，2022年4月2.19亿信托贷款未兑付，宣告暴雷。 4、融创，龙头房企，负债规模约1万亿，2022年3月美元债展期，宣告暴雷。 5、世茂，龙头房企，负债规模约4000亿，2022年3月公告60亿信托展期，宣告暴雷。 6、龙光，粤系房企，负债规模约2000亿，2022年3月公告美元债违约，宣告暴雷 7、祥生，浙江房企，负债规模约1500亿，2022年3月，1200万美元利息违约，宣告暴雷。 8、大发，上海房企，负债规模约300亿，2022年3月2228万元美元债利息无法偿还，宣告暴雷。 9、禹洲，闽系房企，负债规模约900亿，2022年3月美元债利息2125万美元违…

Thanks, I much prefer text over video anyway, and now even people who can't read Chinese can join in on the fun, though Google Translate struggles a bit with the 暴雷 slang https://en.wiktionary.org/wiki/%E6%9A%B4%E9%9B%B7#Verb

I'm an overseas Chinese and can read Chinese but not keeping up with modern slang and 暴雷 means to me what you see in the translation... a thunderbolt?

Re: Real estate giant China Evergrande will be liquidated

#175

Post by doughnutstracks »

berserk1010 wrote: post #49

A couple of things to note: 1.) Why did it take Evergrande 3 years to liquidate? In western countries, liquidation happens in a few months. One should note that Evergrande did not get that big by itself; obviously it had the support of CCP elites to secure huge bank loans. Therefore, when it went bankrupt, the delay was to allow these elites to pull money/liquidable assets out of Evergrande. Thus after 3 years, Everg…

[flagged]

Re: Real estate giant China Evergrande will be liquidated

#176

Post by AlbertCory »

kube-system wrote: post #158
loeg wrote: post #141

Earlier quoted context omitted.

We are talking about the same concept but with different terminology. Not "No, ...".

Maybe we are, but I'm not really sure 'seniority' is a great word to describe it. The term usually implies ranking due to duration. But it's really just a ranking prescribed by law. Often the shortest term lenders who are facilitating the bankruptcy process are first!

"senior" is a term of art, and entirely appropriate:

https://www.investopedia.com/terms/s/seniordebt.asp

Re: Real estate giant China Evergrande will be liquidated

#177

Post by [deleted] »

dgellow wrote: post #159
thriftwy wrote: post #135

Earlier quoted context omitted.

What's wrong with Russian bonds? That land is unlikely to be going away, may contain even more mineral wealth and is climate change resistant.

Aren’t bonds linked to governments, not land? Russia the country can default.

[deleted]

Re: Real estate giant China Evergrande will be liquidated

#178

Post by hollerith »

thriftwy wrote: post #135
onlyrealcuzzo wrote: post #86

Earlier quoted context omitted.

The issues were apparent since 2000. The vast majority of Evergrande's outstanding foreign debt is from >2012. BlackRock, HSBC, and UBS poured in about $3B of the $25B in 2021 alone... And, I'm sorry - if you didn't see a risk doing that in 2021 - you're gonna lose all your money sooner or later. In BlackRock's case - it was primarily for 401k-ers for exposure to Chinese bonds. I think the US should've made it illega…

What's wrong with Russian bonds? That land is unlikely to be going away, may contain even more mineral wealth and is climate change resistant.

The Kremlin has been saying that if the $300 billion worth of Russian Central Bank assets that were frozen in response to the invasion of Ukraine are confiscated (e.g., to give them to Ukraine), the Kremlin is going to respond by confiscating assets in Russia held by Westerners.

Re: Real estate giant China Evergrande will be liquidated

#179

Post by gottorf »

loeg wrote: post #139
miohtama wrote: post #130

Earlier quoted context omitted.

It also means that foreign direct investments to China will dry up. However they’d likely dry up any case due to US vs. China trade war.

A little bit, maybe, but probably not entirely. The joke is that debt investors have no memory. For example, Argentina has defaulted many times in recent memory but was still able to market a 100-year bond in 2017 (which it has already defaulted on).

Wow, I had no idea. There are very few entities in the world whose 100-year bonds I would entertain (maybe Switzerland?), and Argentina would certainly be near the bottom. I can't believe they sold two and three-quarter billion dollars'[0] worth!

[0]: https://www.cnbc.com/2017/06/20/argentina-sees-strong-demand...

Re: Real estate giant China Evergrande will be liquidated

#180

Post by kube-system »

AlbertCory wrote: post #176
kube-system wrote: post #158

Earlier quoted context omitted.

Maybe we are, but I'm not really sure 'seniority' is a great word to describe it. The term usually implies ranking due to duration. But it's really just a ranking prescribed by law. Often the shortest term lenders who are facilitating the bankruptcy process are first!

"senior" is a term of art, and entirely appropriate: https://www.investopedia.com/terms/s/seniordebt.asp

I stand corrected, thanks.
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