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Shares in China Evergrande rose to a record high on Thursday after China’s largest property developer revealed plans to repay much of its costliest debt earlier in the week.

Hong Kong-listed shares rose as much as 5.5 per cent to HK$7.33 in the morning session as investors continued to react favourably to a Tuesday announcement the company would pay off half of its perpetual bonds – those without a repayment deadline – by the end of 2017.

Part of that continuing rally may be self-financed: after its stock closed 8.9 per cent higher on Wednesday, the company also disclosed in an exchange filing that it had repurchased 33.6m of its own shares at a cost of HK$221.8m.

Tuesday’s payment pledge came as the company disclosed net profit last year had fallen 51 per cent to Rmb5.1bn ($740m) thanks to a doubling of interest payments to perpetual bondholders. Evergrande’s net debt of $50bn was also 777 per cent of its equity as of December 31, compared to a sector average of 90 per cent in June.

That pressure to pay off debt is set to ratchet still higher thanks to a clause that pushes interest rates on those bonds up over time, with average cost of repayment for the company on perpetual bonds already at 9.5 per cent.

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