Shares and bonds of Chinese developer Zhenro Properties fell heavily on Friday before one of the company’s yuan bonds was temporarily suspended from trading.
Its Hong Kong-listed shares plunged as much as 80% before paring losses in the afternoon.
The stock was down 66% as of 3.45pm, Hong Kong time, while the price of the 2024 yuan bond had dropped over 20%.
Local financial media Cailianshe said Zhenro had denied market speculation it had plans to restructure its dollar bonds, saying it would redeem its $200 million perpetual bond as planned.
Zhenro said in a filing on January 4 that it had informed its trustee it would redeem in full the perpetual bond due on March 5.
Analysts said it could cause Zhenro legal issues if the developer does not redeem the bond after a call notice, and it could also trigger a cross default.
Large developer, $3.65bn in foreign bonds
Founded in 1998, Zhenro is one of the 20 largest property developers in China, according to a recent S&P Global report.
But Refinitiv data show that it has $3.65 billion worth of international bonds outstanding.
In September, it issued $250 million Regulation S 6.500% senior notes due 2022.
Zhenro – which focuses on the development of residential properties and the development, operation and management of commercial and mixed-use properties – did not immediately respond to a Reuters request for comment
Along with its subsidiaries, the company provides sales of properties, property leasing business, provision of commercial property management services, and sales of goods and provision of design consultation services.
S&P said the developer is known for its green credentials – its green bond framework, published in August 2020, is aligned with the four components of the Green Bond Principles.
“Zhenro commits to allocate all net proceeds of issuances exclusively to green projects that meet eligibility criteria,” Chloe Lin, sustainable finance rating analyst at S&P in Singapore, said.
- Reuters, with additional editing by George Russell
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