An increasing number of Chinese developers are experiencing credit pressures, joining debt-laden property giant Evergrande.
Sinic said it doesn’t expect to repay a $250 million dollar bond due on October 18, according to a Hong Kong exchange filing, which could trigger cross-defaults on its two other notes. The Shanghai-based developer has $694 million of outstanding dollar bonds and missed a domestic payment in September.
Beijing-based Modern Land (China) asked debt holders earlier this week for a three-month extension on a $250 million bond with payments due later this month, according to a Singapore exchange filing. Fellow Beijing homebuilder Xinyuan Real Estate is proposing to pay just 5 percent of the principal on a note due Friday and swap that debt for bonds due 2023 in a move Fitch Ratings called a distressed debt exchange.
Modern Land (China) and Xinyuan Real Estate have $1.35 billion and $760 million of dollar bonds outstanding, respectively.
Property Damage
Following revelations of liquidity issues at China Evergrande, an increasing number of developers have newly surfaced with similar issues, though numerous industry players expect limited contagion risk.
Last week, Fantasia Holdings Group – a Shenzhen-based property developer founded by Zeng Jie, niece of former Chinese vice president Zeng Qinghong – defaulted on a $500 million senior note after failing to make $205.7 million payment.
And in late September, Tianjin-based Sunac asked for government assistance in the city of Shaoxing, saying that «the market is almost frozen» and that it had never experienced such a radical change in the external environment» after a 60 percent year-on-year drop in home sales.
