#China developer default free#

The problems escalated significantly last fall when Evergrande - the second largest property developer in China - began scrambling to raise cash to repay lenders. It is the first missed debt repayment on a dollar bond by Shimao, which had been grappling with mounting financial stress for months.Ĭhina’s real estate sector has been lurching from one crisis to another since 2020, when Beijing started cracking down on excessive borrowing by developers in a bid to rein in their high debt and curb runaway housing prices. The bond had no grace period for the principal, according to its offering document. Shanghai-based Shimao Group failed to pay the interest and principal on a $1 billion bond due Sunday, according to a company filing to the Hong Kong stock exchange. Yi Gang, governor of the People's Bank of China, told 24 financial institutions last month to 'maintain the steady and healthy development of the real estate market and safeguard the legitimate rights and interests of housing consumers.'Ĭhinese regulators, who want to impose financial discipline while avoiding social unrest, have taken targeted measures such as asking state-backed firms to pick up Evergrande assets to ease its liquidity situation.Another major Chinese developer has defaulted on its debt, dealing a new blow to the ailing real estate sector in the world’s second largest economy. ECILT/CNĬhinese leaders, fearful that a persistent property bubble could undermine the country's long-term ascent, are likely to maintain tough curbs on the sector but could soften some tactics as needed, policy sources and analysts told Reuters this week. CSI300 and taking losses since Tuesday to 4.5%.Ĭhina has been ramping up property market curbs since late 2020, introducing new measures to closely monitor and control the debt levels of developers.īut with economic growth cooling and new construction starts slowing, speculation has been rife over whether it would start relaxing those restrictions, as was done during past downturns. CSI000952 gave up small gains to end down 0.1%, lagging a 0.38% gain in the blue-chip index. On Friday, an index tracking A-shares in the sector. Worries of contagion have also hit property developers' shares this week. time, having nearly tripled since late May, while investment-grade spreads remained near their widest in more than two months. MERACYC touched a fresh record late Thursday evening U.S. Spreads on Chinese high-yield corporate dollar bonds. Sinic Holdings Group's 10.5% June 2022 bond VG218484883= dived more than 20% to just 12.25 cents, and Ronshine China Holdings' February 2022 bond fell more than 6% to 68.35 cents. BOND SLUMP DEEPENSĪpart from Xinyuan, Duration Finance data showed other developers' bonds deepening their rout on Friday. The PBOC and the China Banking and Insurance Regulatory Commission (CBIRC) did not immediately respond to Reuters requests for comment.

#China developer default free#

Lenders were also allowed to seek permission to sell assets backed by residential mortgages in order to free up more loan quota, the news agency said. In a sign that authorities may be trying to curb the impact of developers' debt woes, Chinese regulators have told some major banks to accelerate mortgage approvals in the fourth quarter, Bloomberg reported Friday, citing unidentified sources. Refinitiv data show coupon payments by Kaisa Group Holdings 1638.HK and Fantasia Holdings 1777.HK are due this weekend. China's No.2 developer, with more than $300 billion in liabilities and 1,300 real estate projects in over 280 cities, missed a third round of interest payments on its international bonds this week.Ĭhinese developers face more than $500 million in coupon payments on their high yield bonds before the end of this month. The agreement follows warnings from other developers that they could default on their bonds, while still others have taken steps to delay payments in the wake of Evergrande's troubles.

Xinyuan's 14.5% September 2023 bond crashed nearly 30% on Friday to trade at 58.35 cents, according to data provider Duration Finance. 15 had agreed to the exchange, which would see it deliver new bonds worth $205.4 million and $19.1 million cash. Xinyuan said that holders of more than 90% of the company's $229 million notes due Oct.