In the past, China Evergrande Group has always been able to wiggle out of trouble. In turbulent times, billionaire founder Hui Ka Yan would turn to his tycoon friends to prop up his stocks and bonds. The persistent support they’ve provided — buying up Evergrande debt — is why the developer is also Asia’s largest dollar junk bond issuer.
Hui’s pals were at it again earlier this week. As the real estate developer’s bonds tumbled to record lows, CST Group Ltd. said in a filing that it had bought $11 million worth of Evergrande bonds on the open market. Billionaire Cheung Chung Kiu — one of Hui’s buddies in what’s called the Big Two poker club — has a stake in CST. Last September, during another credit crunch, the investment firm bought Evergrande bonds as well, helping to stabilize a market that had grown jittery over another bad turn in the property developer’s fortunes.