Shares in China Evergrande surged nearly 17 per cent after the company’s early repayment of a $2bn bond helped ease investor concerns about leverage at the world’s most indebted property developer.
The jump in the group’s Hong Kong-traded stock on Tuesday came a day after it said it would pay HK$16.5bn (US$2.1bn) to redeem the convertible bond, which it issued in 2018 and was due in 2023.
Evergrande, which as of June owed Rmb835.5bn ($128.8bn), has racked up debt after spending years at the heart of China’s booming residential property market. It has come under intense scrutiny over the past year as Beijing has sought to constrain leverage in the sector. Last March, the company pledged to reduce its borrowings by Rmb150bn per year through 2022.