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Factbox: FACTBOX Georgia on his mind: Donald Trump troubled by more legal woes

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Jan 25 (Reuters) – Donald Trump could learn soon whether he or any associates will be charged or cleared of wrongdoing in a Georgia probe into his efforts to overturn his 2020 election defeat, one of a series of legal threats looming over the Republican former U.S. president:

GEORGIA ELECTION TAMPERING PROBE

On Tuesday, the prosecutor in the state of Georgia spoke to a judge on behalf of a special grand jury empanelled in May to investigate Trump’s alleged efforts to influence that state’s 2020 election results.

Fani Willis, the Fulton County district attorney and a Democrat who will ultimately decide whether to pursue charges against Trump or anyone else, said the grand jury had completed its task and decisions were “imminent.”

The investigation focuses in part on a phone call Trump made to Georgia Secretary of State Brad Raffensperger, a Republican, on Jan. 2, 2021. Trump asked Raffensperger to “find” enough votes needed to overturn Trump’s election loss in Georgia.

Legal experts said Trump may have violated at least three Georgia criminal election laws: conspiracy to commit election fraud, criminal solicitation to commit election fraud and intentional interference with performance of election duties.

Trump could argue that his discussions were constitutionally protected free speech.

U.S. CAPITOL ATTACK

The U.S. Justice Department has investigations under way into both Trump’s actions in the 2020 election and his retention of highly classified documents after departing the White House in 2021.

Both investigations involving Trump are being overseen by Jack Smith, a war crimes prosecutor and political independent. Trump has accused the FBI, without evidence, of launching the probes as political retribution.

A special House of Representatives committee investigating the deadly Jan. 6, 2021, assault by Trump supporters on the U.S. Capitol urged the Justice Department to charge Trump with corruption of an official proceeding, conspiracy to defraud the United States, conspiracy to make a false statement and inciting or aiding an insurrection.

The request is non-binding. Only the Justice Department can decide whether to charge Trump, who has called the Democratic-led panel’s investigation a politically motivated sham.

MISSING GOVERNMENT RECORDS

U.S. Attorney General Merrick Garland appointed Smith to investigate whether Trump improperly retained classified records at his Florida estate after he left office in 2021 and then tried to obstruct a federal investigation.

Garland also appointed former U.S. Attorney Robert Hur for Maryland to investigate the removal of classified records in President Joe Biden’s possession dating to his time as vice president.

It is unlawful to willfully remove or retain classified material.

In Trump’s case, the FBI seized 11,000 documents from the former president’s Mar-a-Lago Florida estate in a court-approved Aug. 8 search. About 100 documents were marked classified; some were designated top secret, the highest level of classification.

Trump has accused the Justice Department of engaging in a partisan witch hunt.

NEW YORK ATTORNEY GENERAL CIVIL LAWSUIT

New York Attorney General Letitia James said in a civil lawsuit filed in September that her office uncovered more than 200 examples of misleading asset valuations by Trump and the Trump Organization business between 2011 and 2021.

Former U.S. President Donald Trump speaks during a rally in Commerce, Georgia, U.S. March 26, 2022. REUTERS/Alyssa Pointer/File Photo

A Democrat, James accused Trump of inflating his net worth by billions of dollars to obtain lower interest rates on loans and get better insurance coverage.

A New York judge ordered that an independent monitor be appointed to oversee the Trump Organization before the case goes to trial in October 2023.

James seeks to permanently bar Trump and his children Donald Jr., Eric and Ivanka Trump from running companies in New York state, and to prevent them and his company from buying new properties and taking out new loans in the state for five years.

James also wants the defendants to hand over about $250 million that she says was obtained through fraud.

Trump has called the attorney general’s lawsuit a witch hunt. A lawyer for Trump has called James’ claims meritless.

James said her probe also uncovered evidence of criminal wrongdoing, which she referred to federal prosecutors and the Internal Revenue Service for investigation.

DEFAMATION CASE

E. Jean Carroll, a former Elle magazine writer, has filed two lawsuits accusing Trump of having defamed her when he denied her allegation that he raped her in New York’s Bergdorf Goodman department store dressing room in late 1995 or early 1996.

Trump accuses her of lying to drum up sales for a book.

Carroll first sued Trump after he denied the accusation in June 2019 and told a reporter at the White House that he did not know Carroll, that “she’s not my type,” and that she concocted the claim to sell her new memoir.

The second lawsuit arose from an October 2022 social media post where Trump called the rape claim a “hoax,” “lie,” “con job” and “complete scam,” and said “this can only happen to ‘Trump’!”

That lawsuit includes a battery claim under the Adult Survivors Act, which starting last Nov. 24 gave adults a one-year window to sue their alleged attackers even if statutes of limitations have expired.

A U.S. judge on Jan. 13 rejected as “absurd” Trump’s effort to dismiss the second lawsuit.

Trump and Carroll are awaiting a decision from a Washington, D.C., appeals court on whether, under local law, Trump should be immune from Carroll’s first lawsuit over his June 2019 comments.

That lawsuit would likely be dismissed if the court decided that Trump spoke within his role as president, and continue if Trump spoke in his personal capacity as Carroll argues.

Any decision would have no effect on Carroll’s second defamation and battery lawsuit. A trial in the first lawsuit is scheduled for April 10.

NEW YORK CRIMINAL PROBE

Although Trump was not charged with wrongdoing, his real estate company was found guilty on Dec. 6 of tax fraud in New York state. A judge this month sentenced Trump’s namesake real estate company to pay a $1.6 million criminal penalty, the maximum the judge could impose.

Jurors convicted the Trump Organization, which operates hotels, golf courses and other real estate around the world, of paying personal expenses for top executives including former chief financial officer Allen Weisselberg, and issuing bonus checks to them as if they were independent contractors.

Weisselberg, the company’s former chief financial officer, pleaded guilty and was required to testify against the Trump Organization as part of his plea agreement. He is also a defendant in James’ civil lawsuit.

Reporting by Joseph Ax, Luc Cohen, Karen Freifeld, Sarah N. Lynch, Jonathan Stempel and Jacqueline Thomsen; Editing by Howard Goller

Our Standards: The Thomson Reuters Trust Principles.

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US

Trump Organization found guilty of tax fraud scheme

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NEW YORK, Dec 6 (Reuters) – Donald Trump’s real estate company was convicted on Tuesday of carrying out a 15-year-long criminal scheme to defraud tax authorities, adding to the legal woes facing the former U.S. president as he campaigns for the office again in 2024.

The Trump Organization – which operates hotels, golf courses, and other real estate around the world – was found guilty of paying personal expenses for top executives including former chief financial officer Allen Weisselberg, and issuing bonus checks to them as if they were independent contractors.

The company faces up to $1.6 million in fines after being convicted on all charges, including scheming to defraud tax authorities, conspiracy and falsifying business records. Trump was not charged in the case.

Justice Juan Merchan, who presided over the trial in state court in New York, set a sentencing date for Jan. 13.

While the fine is not expected to be material for a company of the Trump Organization’s size, the conviction could complicate its ability to do business.

Weisselberg, 75, testified as the government’s star witness as part of a plea deal that calls for a sentence of five months in jail.

Manhattan District Attorney Alvin Bragg, whose office prosecuted the case, called the verdict “very just.”

“The former president’s companies now stand convicted of crimes,” Bragg said in the New York courthouse after the verdict, speaking of the Trump Corporation and Trump Payroll Corporation, the two units of the Trump Organization which were convicted.

Asked if he regretted not charging Trump in the case, Bragg did not respond.

He has said that the office’s investigation into Trump is continuing.

APPEAL

Alan Futerfas, a lawyer for the Trump Organization, said the company would appeal and that the criminal law governing corporate liability was vague.

“It was central to the case,” he told reporters after the verdict.

The jury deliberated for about 12 hours over two days.

[1/6] Former U.S. President Donald Trump attends a rally to support Republican candidates ahead of midterm elections, in Dayton, Ohio, U.S. November 7, 2022. REUTERS/Gaelen Morse/File Photo

The case centered on charges that the company paid personal expenses like free rent and car leases for executives including Weisselberg without reporting the income, and gave them bonuses as non-employee compensation from other Trump entities like the Mar-a-lago Club, without deducting taxes.

According to testimony during the four-week trial, Trump himself signed the bonus checks annually, paid private school tuition for Weisselberg’s grandchildren, authorized the lease for his luxury Manhattan apartment and approved a salary deduction for another executive.

“The whole narrative that Donald Trump was blissfully ignorant is just not real, prosecutor Joshua Steinglass told jurors during his closing argument on Friday.

He said the “smorgasbord of benefits” was designed to keep top executives “happy and loyal.”

Republican Trump, who on Nov. 15 announced his third campaign for the presidency, said in a statement he was “disappointed” by the verdict but called the case a “Manhattan witch hunt.” Both Bragg and his predecessor who brought the charges, Cyrus Vance, are Democrats.

SEPARATE LAWSUIT

The Trump Organization separately faces a fraud lawsuit brought by New York state Attorney General Letitia James.

Trump himself is being investigated by the U.S. Department of Justice over his handling of sensitive government documents after he left office in January 2021 and attempts to overturn the November 2020 election, which he lost to Democrat Joe Biden.

Lawyers for the Trump Organization argued that Weisselberg carried out the scheme to benefit himself, not the company. They tried to paint him as a rogue employee. Weisselberg is currently on paid leave and testified that he hopes to get another $500,000 bonus in January

Trump wrote on his Truth Social platform on Nov. 19. that his family got “no economic gain from the acts done by the executive.”

Weisselberg, who pleaded guilty in August to concealing $1.76 million in income from tax authorities, testified that although Trump signed checks involved, he did not conspire with him.

He said that the company saved money by paying for his rent, utilities, Mercedes-Benz car leases for him and his wife and other personal expenses rather than raising his salary, because a wage hike would have had to account for taxes.

He said Trump’s two sons – who took over the company’s operations in 2017 – gave him a raise after they knew about his tax dodge scheme.

By then, Trump was president, and the company was preparing for greater scrutiny.

“We were going through an entire cleanup process of the company to make sure that since Mr. Trump is now president everything was being done properly,” Weisselberg testified.

Reporting by Luc Cohen and Karen Freifeld in New York; additional reporting by Andrew Hofstetter in New York; Editing by Noeleen Walder and Grant McCool

Our Standards: The Thomson Reuters Trust Principles.

Luc Cohen

Thomson Reuters

Reports on the New York federal courts. Previously worked as a correspondent in Venezuela and Argentina.

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US

Trump rebuffed by judge in New York fraud lawsuit, trial date set

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NEW YORK, Nov 22 (Reuters) – A New York judge has scheduled an October 2023 trial for former U.S. President Donald Trump, three of his adult children and the Trump Organization in a lawsuit brought by New York Attorney General Letitia James accusing them of fraudulently overvaluing the real estate company’s assets and Trump’s net worth.

Justice Arthur Engoron of the state Supreme Court in Manhattan set the trial date during a contentious hearing on Tuesday following motions by the Trumps the night before to have the civil lawsuit dismissed.

“I ruled on all these issues. It seems to me the facts are the same. The law is the same. Parties are the same,” Engoron told Alina Habba, Trump’s lawyer. “You can’t keep making the same argument after you’ve already lost.”

Habba had accused the judge of bias. Trump, a Republican, has accused James, a Democrat, of suing him because she dislikes him and his politics.

In her lawsuit filed on Sept. 21, James accused Trump, his company, his children Donald Jr, Eric and Ivanka and others of inflating Trump’s assets by billions of dollars in a decade of lies to banks and insurers. James called the fraud “staggering.”

The complaint seeks $250 million in damages. It also seeks to stop the Trumps from running businesses in the state and ban Trump and his company from acquiring New York real estate for five years.

Engoron is expected to rule on the motions to dismiss by early January. Trump is already appealing Engoron’s order requiring an independent watchdog to monitor his company.

The trial, scheduled for Oct. 2, 2023, and other legal issues could complicate Trump’s campaign, announced last week, for the presidency in 2024.

The Trump Organization is now on trial in another Manhattan courtroom on criminal tax fraud charges.

In addition, U.S. Attorney General Merrick Garland last week named a special counsel to oversee two criminal investigations, one related to the FBI’s seizure of government documents from Trump’s Florida home and the other examining Trump’s role in efforts to overturn the 2020 presidential election.

Trump also faces a criminal investigation in Georgia into whether he interfered with the 2020 election results in that state.

He has called these cases and investigations politically motivated, and has labeled Engoron a “puppet judge” for James.

In seeking to dismiss the case filed by James, Trump maintained that the attorney general lacked authority to pursue a lawsuit designed to “get” him when neither the public nor the marketplace was harmed.

“Who stands to gain from this highly-politicized farse [sic], aside from the politically-compromised Attorney General of the State of New York?” Trump’s filing said.

Other defendants also urged dismissals.

Lawyers for Trump’s sons called the lawsuit a “textbook example of throwing everything at the wall to see what sticks.” Ivanka Trump’s lawyers said there were no allegations that she lied to or defrauded anyone.

The Trump Organization’s former longtime Chief Financial Officer Allen Weisselberg and its Controller Jeffrey McConney also sought dismissals of claims against them. Both testified as prosecution witnesses in the Manhattan criminal trial in which prosecutors accused the company of engaging in tax fraud spanning 15 years.

Reporting by Karen Freifeld and Jonathan Stempel in New York; Editing by Will Dunham

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CIA boss talks nuclear weapons and prisoners with Putin’s spy chief

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  • Burns to warn Russia’s spy chief not to use nuclear weapons
  • Burns also due to raise issue of U.S. prisoners
  • Kremlin confirm a U.S.-Russia meeting took place in Turkey

LONDON/WASHINGTON, Nov 14 (Reuters) – U.S. Central Intelligence Agency Director William Burns was expected to caution President Vladimir Putin’s spy chief at talks on Monday about the consequences of any use of nuclear weapons, and to raise the issue of U.S. prisoners in Russia, a White House official said.

Kremlin spokesman Dmitry Peskov confirmed to Russian news agencies that a U.S.-Russia meeting had taken place in the Turkish capital Ankara but declined to give details about the participants or the subjects discussed.

The White House spokesperson, speaking on condition of anonymity, said Burns was meeting Sergei Naryshkin, head of Russia’s SVR foreign intelligence service.

It was the first known high-level, face-to-face U.S.-Russian contact since Russia invaded Ukraine in February.

“He is not conducting negotiations of any kind. He is not discussing settlement of the war in Ukraine,” the spokesperson said.

“He is conveying a message on the consequences of the use of nuclear weapons by Russia, and the risks of escalation to strategic stability … He will also raise the cases of unjustly detained U.S. citizens.”

Burns is a former U.S. ambassador to Russia who was sent to Moscow in late 2021 by President Joe Biden to caution Putin about the troop build-up around Ukraine.

“We briefed Ukraine in advance on his trip. We firmly stick to our fundamental principle: nothing about Ukraine without Ukraine,” the spokesperson said.

Putin has repeatedly said Russia will defend its territory with all available means, including nuclear weapons, if attacked. He says the West has engaged in nuclear blackmail against Russia.

MANY OUTSTANDING ISSUES

The remarks raised particular concern in the West after Moscow declared in September that it had annexed four Ukrainian regions that its forces partly control.

The U.S.-Russian contact in Turkey was first reported by Russia’s Kommersant newspaper. The SVR did not respond to a request for comment.

Beyond the war, Russia and the United States have a host of outstanding issues to discuss, ranging from the extension of a nuclear arms reduction treaty and a Black Sea grain deal to a possible prisoner swap and the Syrian civil war.

U.N. Secretary General Antonio Guterres, asked at a summit of the Group of 20 (G20) leading economies in Indonesia about the meeting in Turkey, said the United Nations was not involved.

Biden said this month he hoped Putin would be willing to discuss seriously a swap to secure the release of U.S. basketball star Brittney Griner, who has been sentenced to nine years in a Russian penal colony on drugs charges.

Former U.S. Marine Paul Whelan, who holds American, British, Canadian and Irish passports, was sentenced in 2020 to 16 years in a Russian jail after being convicted of spying, a charge he denied.

Viktor Bout, a Russian arms dealer jailed in the United States, has been mentioned as a person who could be swapped for Griner and Whelan in any prisoner exchange.

Reporting by Reuters; Additional reporting by Jonathan Spicer in Turkey; Editing by Gareth Jones

Our Standards: The Thomson Reuters Trust Principles.

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Business

China stocks notch trillion-dollar gain on hopes of reopening, better U.S. ties

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  • Hang Seng surges to best week since 2011
  • Tech, property stocks lead gains
  • Yuan, commodities, China-sensitive luxury stocks rise

SINGAPORE, Nov 4 (Reuters) – Chinese markets soared and the yuan rose on Friday, with about a trillion dollars added to the value of Chinese stocks in week, as rumours and news reports fed hopes for twin relief in U.S.-China tension and China’s tough COVID rules.

The Hang Seng (.HSI) surged 5.3% and notched its biggest weekly gain in 11 years. The Shanghai Composite (.SSEC) rose 2.4% for a 5.3% weekly gain, the largest in more than two years and China-sensitive assets around the world rose sharply.

Bloomberg News reported initial U.S. inspections of audit papers at U.S.-listed Chinese companies – a long-running point of regulatory tension and risk – finished ahead of time, raising hopes that the U.S. officials were satisfied.

Unsubstantiated social media posts flagging an aim to relax COVID rules in March have also driven optimism all week and seemed to get new momentum on Friday.

A former Chinese senior disease control official told a closed-door conference that substantial changes to the country’s zero-COVID policy were set to take place in the next five to six months, according to a recording of the session heard by Reuters.

“Any indication that some rules could be relaxed would be an immediate dose of grease in the jarring cogs of China’s economy,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

Focus was now on a press conference from China health authorities on Nov. 5.

Gains were broad, overshadowing a downbeat mood in global markets on the prospect of U.S. interest rates rising further than previously expected. Property and tech shares led the way.

Shares in online giants Alibaba (9988.HK) and JD.com (9618.HK) each rose more than 10% and the Hang Seng Tech index (.HSTECH) rose 7.5%. Property manager Country Garden Services rose 15% and an index of mainland developers (.HSMPI) rose 9%.

Hedge fund manager Lei Ming said the re-opening rumour is just the trigger for a rebound in an oversold market.

“The main reason for the market jump is that selling pressure had been exhausted after the market fell so much.”

Gains in value, across Hong Kong, Shenzhen and Shanghai over the week are approximately $1 trillion. However the Hang Seng remains down 30% this year against a 24% fall in world stocks (.MIWD00000PUS). The Shanghai Composite is down 15% this year.

A view of a giant display of stock indexes, following the coronavirus disease (COVID-19) outbreak, in Shanghai, China October 24, 2022. REUTERS/Aly Song/File Photo

The rally extended to commodities markets with iron ore futures surging on Friday, and China-sensitive stocks listed in London and Europe.

Miners such as Rio Tinto (RIO.L) and Anglo American (AAL.L) rose sharply along with luxury retails like LVMH (LVMH.PA) and Swiss jeweller Richemont (CFR.S).

U.S.-listed China stocks surged in premarket trading, with KraneShares CSI China Internet ETF and iShares MSCI China ETF (MCHI.O) set for weekly gains after sharp declines in October.

Strategists at TD Securities continue to expect a gradual easing of zero-COVID restrictions, warning that markets could be in for some disappointment if investors are expecting something more rapid.

China stocks market cap

BUY THE RUMOUR

Changes to COVID policies have not been officially flagged. A foreign ministry spokesman said on Tuesday he was not aware of the situation, when asked about rumours on social media that China was planning a reopening from strict COVID curbs in March.

Bloomberg News also reported on Friday, citing unnamed people familiar with the matter, that China was working towards relaxing rules that penalise airlines for carrying COVID-positive passengers.

A foreign ministry spokesman later said he was not aware of the report and that China’s COVID policies were consistent and clear.

An early conclusion to audit checks has also not been confirmed by either Chinese or U.S. officials. Yet markets have desperate reasons to rally after the Hang Seng hit a 13-year low last month in the wake of China’s Communist Party Congress.

“I do not see anything new that has changed the Hong Kong and China investment environment,” said Frank Benzimra, head of Asia equity strategy at Societe Generale in Hong Kong.

“The only explanation I have is that the sell-off has been excessive post-Congress, valuation on some offshore names has been very distressed, and there is some bottom-fishing.”

The currency joined in the rally, jumping more than 0.5% to touch a one-week high of 7.2340 per dollar.

Reporting by Medha Singh in Bengaluru, additional reporting by Summer Zhen in Hong Kong. Writing by Tom Westbrook. Editing by Sam Holmes and Saumyadeb Chakrabarty

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Business

Trading in China Evergrande shares, onshore bonds halted pending announcement

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The China Evergrande Centre building sign is seen in Hong Kong, China December 7, 2021. REUTERS/Tyrone Siu

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HONG KONG, March 21 (Reuters) – Shares of embattled property developer China Evergrande Group (3333.HK) and onshore bonds issued by its flagship unit Hengda Real Estate Group were suspended from trading on Monday, pending an announcement by the company.

Trading was also halted in shares of its property services unit, Evergrande Property Services Group Ltd (6666.HK), and electric vehicle unit, China Evergrande New Energy Vehicle Group Ltd (0708.HK), exchange filings showed.

The filings gave no further details.

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Evergrande, the world’s most indebted developer with over $300 billion in liabilities, has been struggling to repay its suppliers and creditors and complete projects and homes.

Hengda secured approval from its onshore bondholders over the weekend to delay a coupon payment due last September to September 2022, according to a filing by the company’s lawyer to the Shenzhen Stock Exchange on Sunday.

Hengda held a meeting with creditors of the 4 billion yuan ($629 million) 2025 bond on March 18-19 to approve the payment of interests incurred between September 2020 to September 2021 to be made in September 2023. read more

Evergrande has so far avoided technical bond defaults onshore, though it has missed payments on some offshore bonds.

Evergrande shares traded at HK$1.65 before the suspension. They have gained 3.8% this year after plunging 89% in 2021.

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Reporting by Clare Jim and Donny Kwok in Hong Kong, Beijing newsroom; Editing by Himani Sarkar

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China Evergrande shares hit new low amid debt crisis; Kaisa misses pay date

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The logo of China Evergrande Group is seen on the property developer’s headquarters in Shenzhen, Guangdong province, China, Sept. 26, 2021. REUTERS/Aly Song/File Photo

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  • Hopes of debt restructuring keep floor under Evergrande shares
  • Evergrande has not yet confirmed default
  • ‘Market will want to wait and see and not give up yet’ -analyst
  • Trading in shares of Kaisa suspended

HONG KONG, Dec 8 (Reuters) – China Evergrande Group’s shares hit a record low on Wednesday after a missed debt payment deadline put the developer at risk of becoming the country’s biggest defaulter, even as hopes of a managed debt restructuring calmed fears of a messy collapse.

So far, any Evergrande (3333.HK) fallout has been broadly contained, and with policymakers becoming more vocal and markets more familiar with the issue, consequences of its troubles are less likely to be widely felt, market watchers have said.

Failure by Evergrande to make $82.5 million in interest payments due Nov. 6 on some U.S. dollar bonds would trigger cross-default on its roughly $19 billion of international bonds, with possible ramifications on China’s economy and beyond.

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While the 30-day grace period is over, Evergrande has not announced if the bonds have formally defaulted.

The developer did not immediately respond to a Reuters request for comment.

“Without the official announcement, the market will want to wait and see and not give up yet; otherwise Evergrande’s share and bond prices should have tumbled a lot more,” said Steven Leung, director of UOB Kay Hian in Hong Kong.

“The market also wants to wait and see what can be done with local government stepping in now,” Leung added, referring to the move by Evergrande’s home province to help contain the risk.

Evergrande was once China’s top property developer, with more than 1,300 real estate projects. With $300 billion of liabilities, it is now at the heart of a property crisis in China this year that has crushed almost a dozen smaller firms.

Trading in shares of embattled smaller peer Kaisa Group Holdings (1638.HK) was suspended on Wednesday, after a source with direct knowledge of the matter said it was unlikely to meet its $400 million offshore debt deadline on Tuesday. read more

Kaisa, China’s largest holder of offshore debt among developers after Evergrande, had not repaid the 6.5% bond by the end of Asia business hours, the person said, which could push the notes into technical default, triggering cross defaults on its offshore bonds totalling nearly $12 billion.

Kaisa declined to comment.

Bondholders owning over 50% of the notes in question sent the company draft terms of forbearance late on Monday, a source previously told Reuters.

Even in the case of a technical default, Kaisa and offshore bondholders would continue the discussions, two sources with knowledge of the matter said.

SHARES HIT RECORD LOW

Evergrande’s shares, which have given up more than 20% this month, were down 6% in the afternoon at HK$1.72 – lowest since their November 2009 debut. The broader market (.HSI) was steady.

Its notes due last month , one of two tranches with a coupon payment deadline that passed on Monday, traded at 18.613 cents on the dollar, Duration Finance data showed, versus 18.875 from the close of Tuesday Asia hours.

Kaisa’s bond due April 2022 traded at 36.397, little changed from the day earlier but down from 37.89 last week.

The government has repeatedly said Evergrande’s problems can be contained and moves to boost liquidity in the banking sector along with the firm’s plans to forge ahead with a restructuring of its overseas debt have helped reassure global investors.

The provincial government of Guandong, where Evergrande is based, stepped in last week to help manage the fallout, reinforcing the view that its failure would be managed.

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Reporting by Anne Marie Roantree and Donny Kwok; Editing by Himani Sarkar

Our Standards: The Thomson Reuters Trust Principles.

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Evergrande debt deadline passes with no sign of payment -sources

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The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song/File Photo

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HONG KONG/SHANGHAI, Dec 7 (Reuters) – Some offshore bondholders of China Evergrande Group (3333.HK) did not receive coupon payments by the end of a 30-day grace period, four people with knowledge of the matter said, pushing the cash-strapped property developer closer to formal default.

Failure to make $82.5 million in interest payments that were due last month would trigger cross-default on the firm’s roughly $19 billion of international bonds and put the developer at risk of becoming China’s biggest-ever defaulter – a possibility that has loomed over the world’s second-largest economy for months.

Once China’s top property developer, with over 1,300 real estate projects and $300 billion of liabilities, Evergrande has been the poster child of a property crisis in China this year that has already ripped down nearly a dozen smaller developers.

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The government has repeatedly said Evergrande’s problems can be contained and moves to boost liquidity in the banking sector along with the firm’s plans to forge ahead with a restructuring of its overseas debt have helped reassure global investors.

“The market already had certain expectations about this (non-payment)”, said strategist Kenny Ng at Everbright Sun Hung Kai Securities. It “just waited to see when this will happen”.

“At the same time, investors are watching the development of Evergrande, including whether it is heading for debt restructuring or its creditor repayment plan,” Ng said.

On Monday, the developer said it had established a risk-management committee that included officials from state entities to assist in “mitigating and eliminating the future risks”. read more

That came after it earlier said creditors had demanded $260 million and that it could not guarantee funds to repay debt. That prompted authorities to summon its chairman and reassure markets that broader risk could be contained. read more

So far, any Evergrande fallout had been broadly contained in China and with policymakers becoming more vocal and markets more familiar with the issue, consequences of Evergrande’s troubles are less likely to be widely felt, market watchers have said. read more

State involvement and hope of managed debt restructuring helped lift Evergrande stock as much as 8.3% a day after diving 20% to a record closing low. Still, it ended Tuesday up only 1.1% while its bonds continued to trade at distressed levels.

Notes due Nov. 6, 2022, – one of two tranches with a coupon payment deadline that passed Monday midnight in New York – traded at 18.282 cents on the dollar, Duration Finance data showed, little changed from a day earlier.

SELL OFF

Founded in 1996, Evergrande epitomised a freewheeling era of borrowing and building. That business model was scuttled, however, by hundreds of new rules designed to curb developers’ debt frenzy and promote affordable housing.

Evergrande became just one of a number of developers subsequently starved of liquidity, prompting offshore debt default and credit-rating downgrades, and a plunge in the value of developers’ stocks and bonds.

Smaller peer Kaisa Group Holdings Ltd (1638.HK) – China’s largest offshore debtor among developers after Evergrande – also risks defaulting on a $400 million bond maturing on Tuesday having failed to make a deal with bondholders.

To avoid an overall default, bondholders owning over 50% of the 6.5% notes due Dec. 7 sent Kaisa draft terms of forbearance late on Monday to work toward a solution, a person with direct knowledge of the matter old Reuters. Kaisa started discussing forbearance with bondholders last week, the person said.

Another person with direct knowledge said discussions are at preliminary stages and that it will take time to finalise terms.

The people declined to be identified as the information was confidential.

Responding to Reuters’ request for comment, Kaisa said it is open to discussion on forbearance, without elaborating.

Sources previously told Reuters that the bondholders, had offered Kaisa $2 billion in funding last month but that no major progress on the offer was made. read more

Shares of Kaisa – the first Chinese developer to default on an offshore bond in 2015 – rose 1.1% on Tuesday.

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Reporting by Clare Jim and Scott Murdoch in Hong Kong and Andrew Galbraith in Shanghai; Editing by Sumeet Chatterjee and Christopher Cushing

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China’s Kaisa fails to get bondholders nod to extend maturity, risks default

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A sign of the Kaisa Plaza, a real estate property developed by Kaisa Group Holdings, is seen near its apartment building in Beijing, China December 1, 2021. REUTERS/Tingshu Wang

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  • Kaisa $400 million 6.5% notes due on Dec. 7
  • Kaisa still looking at asset sales, extending debt
  • Evergrande’s 30-day grace period for missed coupon on Dec. 6

Dec 3 (Reuters) – Chinese property developer Kaisa Group Holdings Ltd (1638.HK) said on Friday it failed to secure the minimum 95% approval it needed from offshore bondholders to extend the maturity of a $400 million note due next week, raising the risk of a default.

With the Chinese property sector gripped by an unprecedented liquidity squeeze, Kaisa now faces the possibility of defaulting on its 6.5% offshore bonds due Dec. 7 and drawing renewed focus on other developers also staring at a wall of offshore debt maturing over the next few months.

Kaisa had hoped to exchange the $400 million 6.5% offshore bonds for new notes due June 6, 2023 at the same interest rate if at least 95% of holders accepted. It did not disclose how many bondholders had consented to the offer.

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Shares of the embattled property firm dropped 9.8% to a record low of HK$0.92, taking the stock’s plunge so far this year to around 75%.

The firm, which became the first Chinese property developer to default on its dollar bonds in 2015, said it had been in talks with representatives of certain bondholders, but no “legally binding agreement” had been entered into yet.

“To ease the current liquidity issue and reach an optimal solution for all stakeholders, the company is assessing and is closely monitoring the financial condition and cash position of the group,” it said on Friday.

It added that it still exploring selling assets and extending or renewing debt obligations, but cautioned there was no guarantee it would be able to meet the Dec. 7 maturity.

A failure to repay or reach an agreement with creditors would have “a material adverse effect” on Kaisa’s financial condition, it said.

Kaisa is the second-largest dollar bond issuer among China’s property developers after China Evergrande Group (3333.HK), which has more than $300 billion in liabilities, and like the others has been scrambling to raise capital to stave off a default.

Reuters reported last month that the firm was looking to sell its Hong Kong-listed property management unit, Kaisa Prosperity Holdings Ltd (2168.HK).

Last week, in its notes exchange offer, Kaisa said it could consider a debt restructuring exercise if bondholders did not approve the extension of maturity.

Kaisa’s failure in getting a much-needed lifeline from its creditors will also weigh on other smaller developers that are looking to avoid long and messy litigation and restructuring processes, analysts have said.

Also on the horizon is the end of a 30-day grace period for Evergrande, which has been narrowly avoiding defaults, after it failed to pay coupons totalling $82.5 million due on Nov. 6.

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Reporting by Sameer Manekar in Bengaluru; Writing by Sumeet Chatterjee and Nikhil Kurian Nainan; Editing by Shri Navaratnam and Christopher Cushing

Our Standards: The Thomson Reuters Trust Principles.

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Investors await Evergrande’s overdue $148 mln payment as debt woes grow

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A man rides an electric bicycle past the construction site of Guangzhou Evergrande Soccer Stadium, a new stadium for Guangzhou FC developed by China Evergrande Group, in Guangzhou, Guangdong province, China September 26, 2021. REUTERS/Aly Song/File Photo

  • Evergrande due to pay $148 mln bond coupon on Wednesday
  • Shares of developer Fantasia plunge 50% after missing payment
  • S&P downgrades Shimao Group to “BB+” from “BBB-“

SHANGHAI/HONG KONG, Nov 10 (Reuters) – Cash-strapped China Evergrande Group (3333.HK) faced a Wednesday deadline for making an offshore bond payment, while a credit rating downgrade on another property firm added to mounting concerns about a liquidity squeeze in the sector.

Evergrande, the world’s most indebted developer, has been stumbling from deadline to deadline in recent weeks as it grapples with more than $300 billion in liabilities, $19 billion of which are international market bonds.

The company has not defaulted on any of its offshore debt obligations, but another overdue $148 million bond payment must be made on Wednesday. There was no word on that payment as of early afternoon Asia time.

The developer, which also has coupon payments totalling more than $255 million on its June 2023 and 2025 bonds on Dec. 28, declined to comment when contacted by Reuters about its Wednesday payment deadline. read more

China’s property woes rattled global markets in September and October. There was a brief lull in mid-October after Beijing tried to reassure markets the crisis would not be allowed to spiral out of control. read more

But concerns have resurfaced, with the U.S. Federal Reserve warning on Tuesday that China’s troubled property sector could pose global risks.

More developers are seeing their credit ratings slashed on their worsening financial profiles.

S&P Global Ratings said on Wednesday it had downgraded property developer Shimao Group Holdings’ (0813.HK) rating to “BB+” from “BBB-” over concerns that tough business conditions would hinder the company’s efforts to reduce debts.

S&P considers a rating under “BBB-” to be speculative grade.

Worries over the potential fallout from Evergrande have also roiled China’s property sector in recent days, slamming the bonds of real estate companies amid worries the crisis could spread to other markets and sectors.

Shares of developer Fantasia Holdings (1777.HK) plunged 50% on Wednesday after it said there is no guarantee it will be able to meet its other financial obligations following a missed payment of $205.7 million that was due Oct. 4.

FINANCING OPTIONS

Underlining the liquidity squeeze, some real estate firms disclosed plans to issue debt in the inter-bank market at a meeting with China’s inter-bank bond market regulator, the Securities Times reported on Wednesday. read more

In the near future, real estate companies will issue bonds in the open market for financing, while banks and other institutional investors will assist via bond investment, said the paper.

Debt-laden developers including Evergrande and peer Kaisa Group (1638.HK) have also been looking to raise cash to repay their many creditors by selling some of their property and other business assets.

Beijing has been prodding government-owned firms and state-backed property developers to purchase some of Evergrande’s assets to try to control the fall. read more

Rising concerns about the developers’ woes spreading to other sectors was visible on Wednesday as the spread, or risk premium, between lower risk, investment grade Chinese firms and U.S. Treasuries widened to a more than five-month high. (.MERACCG)

Despite the debt woes of Evergrande, its electric vehicles (EV) unit is pushing ahead with its business plan. The unit is seeking Chinese regulatory approval to sell its inaugural Hengchi 5 sport-utility vehicles. read more

China Evergrande New Energy Vehicle Group Ltd (0708.HK) plans to sell HK$500 million ($64 million) worth of shares to fund production of new energy cars.

Shares in Evergrande were little changed from previous close on Wednesday afternoon, while the EV unit was up 2.2%.

Founded in Guangzhou in 1996, Evergrande epitomised a freewheeling era of borrowing and building. But that business model has been scuttled by hundreds of new rules designed to curb developers’ debt frenzy and promote affordable housing.

Any prospect of Evergrande’s demise raises questions over more than 1,300 real estate projects it has in some 280 cities.

Reporting by Andrew Galbraith in Shanghai and Clare Jim in Hong Kong; Writing by Sumeet Chatterjee and Ira Iosebashvili; Editing by Stephen Coates and Lincoln Feast.

Our Standards: The Thomson Reuters Trust Principles.

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