China Evergrande bonds drop; contagion fears spread; Greenland down; AMC lower

By Cristal Cody

Tupelo, Miss., Sept. 20 – Chinese real estate developer bonds sank further on Monday as default concerns over China Evergrande Group spread, sparking fears of a Lehman-type financial collapse.

China Evergrande Group’s dollar bonds shed about 2 points to 5¼ points over the session with the paper now trading in the low to mid-20s bid area, according to a market source.

The 8¾% senior notes due 2025 (C/C/C) slid 3 points to 23¾ bid by the close.

Secondary volume totaled $9.5 million.

Shanghai-based real estate developer Greenland Global Investment Ltd.’s 5.6% senior notes due 2022 (Ba2/BB-) fell more than 2½ points to 82¼ bid on $3 million of paper traded on Monday, a source said.

“There is little doubt that Evergrande is going to fail,” Confluence Investment Management strategists said in a Monday note. “It has interest payments due today and later this week and has already indicated it won’t make them.”

Elsewhere in the distressed space, theater bonds were flat to softer as the number of U.S. deaths from Covid-19 reportedly surpassed the total from the 1918 flu pandemic.

AMC Entertainment Holdings, Inc.’s secured and subordinated notes were down 2¼ points to over 3½ points.

AMC’s 5¾% senior subordinated notes due 2025 (Ca/C) declined 3 7/8 points to 75 1/8 bid, a source said.

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