Investment managers BlackRock and HSBC poured more into Evergrande bonds in the months leading up into the property developer’s liquidity issues, FT reported.
- BlackRock accumulated five Evergrande dollar bonds in August, with one of its high-yield funds having holdings then worth $18 million. It had a total exposure of nearly $400 million based on filings made in June, July, and September.
- HSBC also boosted its Evergrande holdings by 38% since February, making the manager a net buyer of the property firm. Its total exposure was earlier estimated at $31 million but has since declined due to the drop in prices.
- Other investors are also expected to have exposure to Evergrande, with its debt traded on offshore markets accounting for only a small part of its $300 billion obligations.
- Evergrande has two bond payments due within the week, which analysts believe are unlikely to be met by the firm. Its unit Hengda Real Estate pledged to make an interest payment worth CNY252 million or $35.9 million.
BlackRock declined to comment on the matter, while HSBC said it is closely monitoring developments in the real estate sector. BLK is up 1.14%, HSBC up 4.32%, and 3333 down 0.44%.