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MNI: Chinese Developer Defaults Loom Despite Property Support

MNI (Singapore)
MNI (Beijing)

Beijing’s new measures to support the property market may not stop defaults on foreign currency debt.

True

Chinese property developers are at risk of defaulting on higher cost U.S. dollar bonds despite Beijing’s rescue package that includes easier funding to support the ailing property market, with debt restructuring plans needed to minimise losses for creditors, advisers told MNI.

Beijing’s package of 16 measures to stabilise the market comes as CNY181.2 billion of bonds issued by 200 key Chinese real estate companies mature this quarter, including CNY61.7 billion of foreign currency issuance, according to China Real Estate Information Corporation. CIFI Holdings Group and Zhongliang Holdings Group, once regarded as healthy survivors, said this month that they would suspend all principal and interest payments due on offshore financing.

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Chinese property developers are at risk of defaulting on higher cost U.S. dollar bonds despite Beijing’s rescue package that includes easier funding to support the ailing property market, with debt restructuring plans needed to minimise losses for creditors, advisers told MNI.

Beijing’s package of 16 measures to stabilise the market comes as CNY181.2 billion of bonds issued by 200 key Chinese real estate companies mature this quarter, including CNY61.7 billion of foreign currency issuance, according to China Real Estate Information Corporation. CIFI Holdings Group and Zhongliang Holdings Group, once regarded as healthy survivors, said this month that they would suspend all principal and interest payments due on offshore financing.

Keep reading...Show less