Reorg Blog

Written by Ian Howland, Research and Data Analyst || While chapter 11s across nearly all sectors continue to cruise well below the levels of prior years, there has been a recent uptick in cases reporting more than $1 billion in liabilities. Three billion-dollar bankruptcies were filed in the seven-day stretch of Nov. 11 through Nov. 17, after three others filed over the Oct. 14-Oct. 31 period. As a result, one-third of all year-to-date billion-dollar chapter 11s have been filed within the past six weeks. Notwithstanding this recently elevated activity, billion-dollar filings are down 67% year-over-year from 2020, 31% from 2019...

Chinese homebuilder and construction company Jiangsu Zhongnan Construction has been in the news due to exposure to Evergrande receivables. Liquidity of the home builder has been under pressure given that Evergrande is its single-largest customer. Our Asia Core Credit reporters got hold of a statement Zhongnan made to investors, disagreeing with S&P’s decision to lower its credit ratings to B- citing perceived weakening liquidity. In its statement, Zhongnan said it has further reduced its leverage ratios, and that its cash against short-term borrowings was up over the June 30 level. In a second story about Zhongnan last week, we reported that the company told...

Airline bonds have been falling throughout the week following the re-introduction of Covid-19 restrictions in some European countries where cases have been rising. German airline Deutsche Lufthansa’s €750 million senior unsecured notes due 2025 are down over 0.5 points from Friday last week to 101.8 and its €850 million senior unsecured notes due 2028 have declined almost 1 point to 103.3. British Airways parent International Airlines Group’s €500 million senior unsecured notes due 2025 have contracted about 0.6 points to 100.4. This is an extract from the Europe Credit Daily, to subscribe to this intelligence request a trial here.

Written by Stephen Aldred, Managing Editor|| China Evergrande and Chinese real estate developers continue to dominate the news cycle and activity in Asian high-yield, and will do so for some time to come. Last week, widespread rumors that the People’s Bank of China (PBOC) had discussed a potential lifting of restrictions on its current “three red lines” policy controlling developers’ leverage led to a jump in stocks and offshore bonds of benchmark names such as Country Garden, Sunac China Holdings, Yuzhou Group, Shimao Group and China Aoyuan. The strong run continued into the early part of this week, until yesterday when overall offshore China bonds traded off 1-3...

Written by Shan Qureshi, Senior Legal Analyst || A rebalance of stakeholder power in the traditionally debtor-friendly restructuring regime of France took hold in October with the introduction of a new pre-insolvency measure, sauvegarde accélérée. France follows the Netherlands and Germany, which have both introduced their own new creditor-friendly restructuring tools - the WHOA and STarug, respectively - in compliance with the EU directive on preventive restructuring frameworks. The three new processes join the English law Part 26A Restructuring Plan, with all containing a cross-class cramdown power, albeit with varying degrees of court involvement and disclosure as discussed on our recent...

Since 2019, Reorg's Asia Core Credit team has been publishing updates on the Chinese real estate industry, as PRC government-driven credit tightening put smaller debt-laden Chinese real estate developers under immense pressure. This has played out over many months and our most recent updates laid out the new measures released by the Beijing municipal govenment for the supervision and administration of the real estate companies' presale funds. The proposal aims at stregthening the regulation of presale funds, which include homebuyers deposits, down payments, mortgage payments and other payments, ensuring the delivery of projects, protecting home buyers' rights and promoting the healthy...