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MNI: Defaults Loom For Chinese Developers - Analysts

MNI (Singapore)

Government financial assistance has been scant as policymakers focus on rebalancing an oversupplied market.

True

The liquidity squeeze on Chinese property developers is expected to trigger more debt defaults as the government seeks to rebalance a market left oversupplied after the last boom, with only modest financial support offered to backstop confidence during the transition, analysts said.

The over 20% y/y decline in home sales over the first eight months of the year, coupled with a contraction in financing through loans and bond issuance, could prove a toxic combination for cash-strapped developers struggling under debt repayment pressures.

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The liquidity squeeze on Chinese property developers is expected to trigger more debt defaults as the government seeks to rebalance a market left oversupplied after the last boom, with only modest financial support offered to backstop confidence during the transition, analysts said.

The over 20% y/y decline in home sales over the first eight months of the year, coupled with a contraction in financing through loans and bond issuance, could prove a toxic combination for cash-strapped developers struggling under debt repayment pressures.

Keep reading...Show less