Chinese property firms’ bond issuances fell sharply in first quarter, Beike’s research unit says
- Developers’ offshore issuances fell by 68 per cent, while the overall money raised declined by 43 per cent
- Investors and creditors are still concerned about Chinese developers’ debts, research unit BRI says in report
“The risk associated with this industry persists, and investors and creditors – offshore in particular – are still concerned about Chinese developers’ debts. Even if we see more supportive measures being rolling out, time is needed to restore confidence,” BRI said in a research note on Thursday.
Kaisa bonds rise after it enters joint venture with state developer, bad asset manager
And the cracks in the sector have widened this year, with the likes of Sunac China Holdings, the country’s fourth-largest developer, and Shimao Holdings Group, joining the list of distressed Chinese property firms.
Distress sales by Chinese luxury homeowners in Hong Kong on the rise
At the same time, more than 60 local governments ripped up old, restrictive rules in the first quarter to revive the property market. However, Chinese developers still do not have enough breathing room and their access to funds is still narrow.
A tightened credit environment and the sizeable refinancing needs for the rest of 2022 will further strain Chinese developers’ liquidity and increase the number of defaults or distressed deadline extensions, rating agency Moody’s said in a report last week.
“We expect developers’ refinancing ability to remain constrained, particularly for financially weak developers,” said Daniel Zhou, an analyst at Moody’s.
Shenzhen’s 2021 home sales falls to 15-year low amid market freeze
S&P Global Rating said on Thursday that it sees China’s residential sales dropping 15 per cent to 20 per cent this year and by another 3 per cent in 2023. “We expect an ‘L-shaped’ dynamic in China’s residential property market, with a large fallout in the first half followed by flatter year-on-year patterns in sales,” said S&P credit analyst Esther Liu.