Evergrande deadline sends chills through $400bn Asian debt market

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Financial Times 22 September, 2021 - 10:09pm 37 views

How much is evergrande debt?

After years of perilous borrowing, the company last week said it may have to default on its debt. That's a big deal because, with over $300 billion in liabilities, Evergrande is the most indebted real estate company in the world. For comparison, Russia's state debt in 2020 was $257 billion. CNETChina's Evergrande debt crisis: What it is and why it matters

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Thomas Hale and Hudson Lockett in Hong Kong

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Deepening worries over Evergrande have ignited selling in a $428bn corner of the Asian debt market, underscoring how the crisis at the Chinese property developer is spreading to other assets as traders and investors brace for a crucial payment deadline on Thursday.

The Evergrande bond on which the interest payment was due was trading at around $0.28 on the dollar, a signal of substantial distress, as traders fretted over the potential fallout if the company begins missing payments.

Yields on US dollar-denominated bonds issued by riskier Asian borrowers have soared to almost 12 per cent this week, the highest level since a jump during the early stages of the coronavirus pandemic, according to an Ice Data Services index. The yields stood at 7 per cent at the start of the year.

A failure to make an interest payment due on Thursday on one of its offshore dollar bonds could spark China’s biggest-ever debt restructuring. It would also mark the most severe shock to date across a market to which international asset managers had been enticed by lucrative returns as global bond yields sat near historic lows.

It would be “naive to think that the turmoil in the [property] market doesn’t have the potential to have second-order and third-order impact . . . particularly on the capital markets and the bond markets”, Noel Quinn, HSBC chief executive, told a Bank of America conference on Wednesday.

Evergrande’s liquidity crunch represents the latest regulatory risk for global investors in the world’s biggest emerging market, after a chaotic year that has already ushered in unprecedented curbs on the country’s tech and education sectors.

“Right now, as far as I understand, the view offshore, outside China, including Hong Kong and the UK, is near panic about China,” said Stephen Jen, chief executive at Eurizon SLJ Asset Management. “It’s a culmination of all these surprising regulatory measures that have hit the market.”

Another big international fund manager in London said they were inundated with inquiries this week about exposure to Evergrande.

The company, which has about $20bn outstanding in dollar-denominated debt, faces $83.5m in interest payments due on Thursday. As of its most recent filings in June, emerging market specialist Ashmore was the biggest single holder of the bond with a $63m stake, while other big investors as of July included UBS and HSBC.

A group of offshore investors in Evergrande this month hired law firm Kirkland & Ellis and investment bank Moelis to advise them on a potential restructuring.

The five-year bond, which pays regular “coupon” payments of 8.25 per cent and was issued in 2017 when Evergrande chair Hui Ka Yan was crowned China’s richest man, has sold off sharply. It is trading at 25 cents on the dollar, a highly distressed level, compared with close to its par value at the start of June. If a payment is missed, Evergrande will have a 30-day grace period before an official default.

On Wednesday, Evergrande said a Rmb232m ($35.9m) interest payment also due on Thursday on an onshore bond had been “resolved through off-exchange negotiations”, but did not clarify when or how much of that amount it would pay.

On Thursday morning, the People’s Bank of China injected a net Rmb110bn into the country’s financial system, the biggest liquidity boost move in eight months, according to Bloomberg data.

The developer has for months sought to stave off a liquidity crisis, but it has struggled to raise enough cash to reduce its debts while continuing to pay suppliers, creditors and retail investors who descended on its Shenzhen headquarters last week.

While yields on Chinese property developers have soared in recent weeks as the severity of Evergrande’s cash crunch emerged, yields on the Ice index have added 2 percentage points this month alone. Real estate makes up 42 per cent of the market, with most of the borrowing coming from China.

The overall Asian corporate high-yield market has more than doubled from just $169bn in 2014, JPMorgan data showed. While the majority of investment comes from Asia, prominent international funds are also big players in the market, which is one of the most direct routes for offshore investment into China’s strictly controlled financial system.

“The global funds have very big investments in the sector because it’s high yielding,” said one banker based in Hong Kong. He added that while Evergrande had “always been a name that a lot of people felt very uncomfortable with”, some investors “had to have exposure” because of its inclusion in global bond indices, benchmarks against which fund managers’ performance is graded.

Funds managed by HSBC and BlackRock bought Evergrande bonds in July and August respectively and boosted their holdings this year as they expanded in size.

While Evergrande has thrust China’s crackdown on real estate into the spotlight, pressure has been mounting for years. In 2018, the government said proceeds from offshore borrowing should be used to refinance existing debts rather than investing.

As well as the high yields on offer, investors have also been drawn to Chinese assets because of the perception that they are weakly linked with global markets. Lukaszewski suggested that the appeal of the overall high-yield market in Asia was that it “marches to its own beat, and that beat is local factors”.

Jen added: “Sitting in London, just imagine a situation where something happens in the US and everybody in China is in a panic about what has just happened . . . whereas the American investors are very calm. Just think about this contrast . . . which party might be right?”

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China's Evergrande Crisis Could Drag Down Tether And Other Cryptocurrencies: CNBC After Hours

CNBC Television 23 September, 2021 - 08:10am

Notably, this premiere date places Shang-Chi's streaming debut outside of the 45-day exclusive theatrical window planned for the film. This could mean that Shang-Chi will become available for digital purchase and rental before it is available to Disney+ subscribers.

The streaming premiere of Shang-Chi and the Legend of the Ten Rings will be part of the new event Disney+ Day, a celebration for the second anniversary of the streaming service.

Have you seen Marvel's Shang-Chi and the Legend of the Ten Rings?

Along with Shang-Chi, November 12 will also mark the Disney+ premiere of Jungle Cruise, the new Home Alone reimagining Home Sweet Home Alone, a Pixar short film featuring characters from Luca, a new Simpsons short celebrating Disney, an MCU-themed special, a Boba Fett-themed special, the first five episodes of Season 2 of The World According to Jeff Goldblum, several fan-favorite Disney Animation Studios shorts, and other content.

In our review of Shang-Chi and the Legend of the Ten Rings, IGN gave the film an 8, saying that the movie "is a confident introduction to Marvel’s first Asian superhero, delivering the MCU’s best fight choreography and one of its most emotionally complex villains."

Who Exactly Is Behind the Bull Mask on This Season of 'The Masked Singer'?

CNBC 22 September, 2021 - 11:55am

Sep. 22 2021, Published 12:55 p.m. ET

Throughout its many seasons on the air, The Masked Singer has succeeded time and time again at stumping millions of fans (and its own judges) about who could be behind the variety of elaborate masks donned by performers. The show has seen countless big names take to its stage, and it's rare that judges are able to quickly guess who each mystery singer is.

With that being said, the latest season sees a new set of characters take to the stage, one of which is Bull, a matador-styled bull-masked performer who, like many performers before him, is stumping judges and fans on who exactly it could be. So, what do we know about who Bull is? Here's a breakdown.

It was initially teased in an Instagram post by The Masked Singer on Sept. 21, 2021, but there aren't many clues as of now regarding who Bull might be on this season of the show. Of course, we expect that to change on the Sept. 22, 2021, premiere of the show, but as of now, it largely remains a mystery.

The season sneak peek saw Bull accompanied by a picture of a lion and a tiger which marks the only official clue revealed yet.

Aside from that, all we have to go off of is the aforementioned IG post, which shows Bull having a broad-shouldered build and clearly some sort of dancing ability. The costume is, of course, the head of a bull, but the rest of the outfit is a fitted matador-style suit with gold tassels as well as ornate horns, polished hooves, and a red cape.

There is a lot of speculation regarding who exactly could be behind the bull mask on this season of The Masked Singer. Some of the biggest names suggested by fans include Todrick Hall, Antonio Banderas, and Gilbert Gottfried.

Here are a few other guesses we saw mentioned for who Bull could potentially be:

Out of all of those guesses, it appears that most people think it's Todrick.

"It is Todrick Hall because of the scream in 'Circus' is the exact scream in 'Nails, Hair, Hips, Heels' music video, you just have to listen for the scream," wrote on The Masked Singer Instagram, comparing one of Todrick's songs to Britney Spears' "Circus," which Bull recently performed in a preview.

"From the first word, I could tell whose voice it was. It’s Todrick Hall," wrote one user on Reddit, clearly convinced.

"At first when I saw the costume I, like many, thought athlete, but now seeing him perform I can confirm," chimed in another Reddit user. "That's Todrick, I listen to the song 'Nails, Hair, Hips, Heels' religiously and I can easily confirm, the voice, the stage presence, and of course the walk, it is screaming Todrick Hall. If it's not I will eat my favorite underwear."

Despite the aforementioned speculation, Bull hasn't been revealed on the show quite yet! We'll be sure to update as soon as he is, though!

Check out the latest season of The Masked Singer premiering on Sept. 22, 2021, at 8 p.m. EST on FOX.

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