Fantasia downgraded to default status by rating companies as Chinese property sector crisis worsens

Name: Angry protest at headquarters of China Evergrande as property giant faces liquidity crunch
Uploaded: 2021-10-06T04:30:29.000Z
Duration: 2 min 28 s
Description: Angry protest at headquarters of China Evergrande as property giant faces liquidity crunch

Missed debt payment by Fantasia this week adds to China property sector concerns spawned by Evergrande’s liquidity crisis

S&P, Fitch and Moody’s all cut Fantasia to default or near default status

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Fantasia Holdings Group chairman Pan Jun photographed at the Four Seasons Hotel in Central in 2016. Photo: Nora Tam

Chad Bray

Published: 12:30pm, 6 Oct 2021Updated: 10:22pm, 6 Oct 2021

Fantasia Holdings Group, the debt-laden property developer founded by the niece of a former Chinese vice-president, has been downgraded to default or near default status by the three major credit rating companies after it missed a bond repayment this week.

The default by Fantasia adds to growing concerns about the Chinese property sector as China Evergrande Group, the world’s most indebted property developer, teeters towards default.

Fitch Ratings, S&P Global Ratings and Moody’s Investors Service all cut their ratings for Fantasia late on Tuesday to indicate the company was “likely in or very near default” after the Shenzhen-based developer failed to repay US$205.7 million in remaining principal it owed on a US$500 million senior note it took out in September 2016. There was no grace period for the principal repayment.

“The non-payment of Fantasia’s October 2021 US dollar bond triggered events of default on the company’s other US dollar notes, which will become immediately due and payable if the bond trustee or holders of at least 25 per cent in aggregate principal amount of the offshore notes declare so,” Fitch analysts Samuel Hui and Edwin Fan said in a press release on Wednesday.

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Angry protest at headquarters of China Evergrande as property giant faces liquidity crunch

Fitch cut Fantasia’s long-term foreign-currency issuer default rating to “restricted default” status, indicating it has probably defaulted, but not yet entered bankruptcy or ceased operations.

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