28-03-2019, 02:50 PM
Evergrande Founder's $1 Billion Bet on Firm's Bonds Pays Off
> Company’s 2022, 2023 bonds beat real estate peers in returns
> Hui’s net worth increased by 10.9% this year to $35.7 billion
Bloomberg News
March 28, 2019, 4:30 AM GMT+7 Updated on March 28, 2019, 9:15 AM GMT+7
It might have seemed like a bold move when the billionaire founder of China Evergrande Group spent $1 billion of his own money buying the company’s bonds five months ago. Now his bets are handing him handsome returns that beat many asset classes.
Hui Ka Yan, who is chairman at Evergrande, bought more than half of the company’s $1.8 billion bond offering in October, signifying his "support to and confidence in the Group" when some of its dollar notes had plunged to unprecedented lows due to concern over its debt.
The purchase, unusual for an owner of a Chinese property developer, proved to be rather lucrative. The 2022 and 2023 notes have surged to 110 and 111 cents on the dollar respectively after Hui purchased $500 million of them each at par. Hui’s gained more than 17 percent on each tranche, according to Bloomberg-compiled data.
By comparison, high-yield dollar bonds from the country’s real estate sector have returned 13 percent over the same period, according to an ICE BofAML index. The dividend yield on Evergrande shares was less than 5 percent in the past 12 months. Hui said he hasn’t sold any of the $1 billion bonds he bought in October when asked by Bloomberg News in an earnings presser in Hong Kong on Tuesday.
Evergrande’s dollar bonds, along with its peers’, benefited from a return of investor confidence at the beginning of this year on their cheap valuations and the stimulus measures from Chinese authorities. Cities in the country have introduced various easing measures including relaxing price curbs since late last year to boost property markets.
More details in https://www.bloomberg.com/news/articles/...s-pays-off
> Company’s 2022, 2023 bonds beat real estate peers in returns
> Hui’s net worth increased by 10.9% this year to $35.7 billion
Bloomberg News
March 28, 2019, 4:30 AM GMT+7 Updated on March 28, 2019, 9:15 AM GMT+7
It might have seemed like a bold move when the billionaire founder of China Evergrande Group spent $1 billion of his own money buying the company’s bonds five months ago. Now his bets are handing him handsome returns that beat many asset classes.
Hui Ka Yan, who is chairman at Evergrande, bought more than half of the company’s $1.8 billion bond offering in October, signifying his "support to and confidence in the Group" when some of its dollar notes had plunged to unprecedented lows due to concern over its debt.
The purchase, unusual for an owner of a Chinese property developer, proved to be rather lucrative. The 2022 and 2023 notes have surged to 110 and 111 cents on the dollar respectively after Hui purchased $500 million of them each at par. Hui’s gained more than 17 percent on each tranche, according to Bloomberg-compiled data.
By comparison, high-yield dollar bonds from the country’s real estate sector have returned 13 percent over the same period, according to an ICE BofAML index. The dividend yield on Evergrande shares was less than 5 percent in the past 12 months. Hui said he hasn’t sold any of the $1 billion bonds he bought in October when asked by Bloomberg News in an earnings presser in Hong Kong on Tuesday.
Evergrande’s dollar bonds, along with its peers’, benefited from a return of investor confidence at the beginning of this year on their cheap valuations and the stimulus measures from Chinese authorities. Cities in the country have introduced various easing measures including relaxing price curbs since late last year to boost property markets.
More details in https://www.bloomberg.com/news/articles/...s-pays-off