#Evergrande and other Chinese property giants have sizeable off-balance sheet debt: #JPMorgan
Source: Reuters #Oct7
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Source: Reuters #Oct7
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#Evergrande and other Chinese property giants have sizeable off-balance sheet debt: #JPMorgan
//Investment bank JPMorgan has estimated that troubled Chinese property giant Evergrande and many of its major rivals have billions of dollars worth of off-balance sheet debt that, once added on, ramp up their leverage ratios.
"Instead of true deleveraging, we think Evergrande has shifted some of the interest-bearing debt to off-balance sheet debt," JPMorgan's analysts said. "Commercial papers, wealth management products and perpetual capital securities, etc, which are not officially counted as debt."
They estimated Evergrande's "net gearing," as debt as a ratio of a firm's equity is known, was at least 177% at the end of the first half of the year, instead of the 100% its accounts reported.
"It is possible that the real gearing could be even higher, as data on some off-balance sheet debt is not publicly available," JPMorgan added, saying the "disguised" debt as it called it added up to 55% of Evergrande's overall debt.
Other major firms whose gearing levels were likely to be higher than formally reported included R&F Properties (2777.HK) at 139% versus the 123%, #SunacChina Holdings (1918.HK) at 138% versus 87% reported and #CountryGarden (2007.HK) at 76% versus 50% reported.//
Source: Reuters #Oct7
https://www.reuters.com/business/finance/evergrande-other-chinese-property-giants-have-sizeable-off-balance-sheet-debt-2021-10-07/
#PropertyAnalysis #Economy #Finance #CCPRules #Debt #ChinaMarket #Bubble
//Investment bank JPMorgan has estimated that troubled Chinese property giant Evergrande and many of its major rivals have billions of dollars worth of off-balance sheet debt that, once added on, ramp up their leverage ratios.
"Instead of true deleveraging, we think Evergrande has shifted some of the interest-bearing debt to off-balance sheet debt," JPMorgan's analysts said. "Commercial papers, wealth management products and perpetual capital securities, etc, which are not officially counted as debt."
They estimated Evergrande's "net gearing," as debt as a ratio of a firm's equity is known, was at least 177% at the end of the first half of the year, instead of the 100% its accounts reported.
"It is possible that the real gearing could be even higher, as data on some off-balance sheet debt is not publicly available," JPMorgan added, saying the "disguised" debt as it called it added up to 55% of Evergrande's overall debt.
Other major firms whose gearing levels were likely to be higher than formally reported included R&F Properties (2777.HK) at 139% versus the 123%, #SunacChina Holdings (1918.HK) at 138% versus 87% reported and #CountryGarden (2007.HK) at 76% versus 50% reported.//
Source: Reuters #Oct7
https://www.reuters.com/business/finance/evergrande-other-chinese-property-giants-have-sizeable-off-balance-sheet-debt-2021-10-07/
#PropertyAnalysis #Economy #Finance #CCPRules #Debt #ChinaMarket #Bubble
Reuters
Evergrande and other Chinese property giants have sizeable off-balance sheet debt - JPMorgan
Investment bank JPMorgan has estimated that troubled Chinese property giant Evergrande and many of its major rivals have billions of dollars worth of off-balance sheet debt that, once added on, ramp up their leverage ratios.