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SHANGHAI, Sept. 16 (Reuters) – Hengda Real Estate Group Co Ltd, the main unit of China Evergrande Group (3333.HK), on Thursday requested the suspension of trading of its onshore corporate bonds following a downgrade, as the country’s second-largest real estate developer grapples with a liquidity crisis.
The demand follows repeated freezes in bond trading in recent days by the Shanghai and Shenzhen stock exchanges due to trading volatility.
Hengda received notice on September 15 from the rating agency China Chengxin International (CCXI) that the bond ratings had been downgraded to A from AA, and that the bond ratings and its issuer rating were upgraded. a watchlist for further downgrades, he said in a stock market document.
Hengda requested the suspension of trading in its onshore corporate bonds for one day, he said. When trading resumes on September 17, its Shanghai and Shenzhen exchange-traded bonds will only trade in negotiated transactions.
A bond trader, who declined to be identified, said changes in the trading mechanism were likely to limit participation and curb volatility.
“Many companies would adjust the mechanism for trading their bonds before default,” he said.
The company’s bond traded in Shenzhen in January 2023 was last listed at 24.99 yuan on Wednesday, and its bond traded in Shanghai in May 2023 at 30 yuan.
China Evergrande’s June 2025 8.75% dollar bond traded at 29.375 cents Thursday morning, up about 4 cents from Wednesday’s lows, according to financial data provider Duration Finance.
The indebted real estate developer scrambles to raise funds to pay his many lenders and suppliers, as he oscillates between a messy collapse with far-reaching impacts, a managed collapse, or the less likely prospect of a Beijing bailout. Read more
Concerns about possible contagion from Evergrande’s debt crisis have spilled over to other high-yield Chinese issuers. A Chinese dollar high-yield debt index (.MERACYC) fell to 374.646 on Thursday morning, its lowest level since April 14, 2020.
Reporting by Samuel Shen and Andrew Galbraith; Editing by Jacqueline Wong and Stephen Coates
Our Standards: The Thomson Reuters Trust Principles.
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