Over the past 12 months, about two-thirds of Chinese property developers have defaulted on their offshore debt. The most recent debt default was by China SCE Group Holdings Ltd. which had $1.8 billion in bonds suspended last week after saying that it could not meet principal and interest repayments. Country Garden Holdings Limited (OTC:CTRYF) said Tuesday that it would be seeking to renegotiate debt terms with its offshore bondholders.

As of today, there are now just 14 major developers out of 54 in China left who have yet to default on their offshore bonds. Those developers to watch out for are:

Agile Group Holdings Ltd. (OTC:AGPPY)
Shui On Land Ltd. (OTC:SOLLY)
China Jinmao Holdings Group Ltd.
China Vanke Co. Ltd (OTC:CHVKF)
Seazen Group Ltd. (OTC:SZENF)
Sino-Ocean Group Holding Ltd. (OTC:SIOLY)
Greentown China Holdings Ltd.
RK Properties International Ltd.
Longfor Group Holdings Ltd. (OTC:LGFRY)
Dalian Wanda Group Co.
China South City Holdings Ltd.
Yanlord Land Group Ltd. (OTC:YLDGY)
Hopson Development Holdings Ltd.
Gemdale Corp.

Confidence among investors as to the creditworthiness of these developers appears to be waning with the increased number of default cases.

Among the 14 non-defaulting companies, 10 of them are listed on the Hong Kong Stock Exchange. In a market-cap-weighted index of the listed companies, share prices fell Tuesday by 0.13% vs a rise of 0.85% for the Hang Seng Index.

Why It Matters: Country Garden's shares plunged 11% in Hong Kong Tuesday after it missed a debt repayment and announced that it was appointing advisors and lawyers to handle discussions with its offshore debt holders.

“We wish to pursue a holistic solution to fully address the Company’s current offshore debt risk, to enable the Company to restore its business operations and achieve long-term healthy development and, to the greatest extent, protect the rights and interests of all stakeholders including customers, employees and creditors,” the company said in an exchange filing.

The latest admission of a credit squeeze by China’s largest property firm by number of developments comes on the back of a wave of defaults this year by other developers on their bonds.

Country Garden had delivered 1.12 million housing units as of September 2023, the company said. Pre-sale funds for housing units that are currently in development are stored in escrow accounts, it added.

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Latest China Vanke Co Stock News | OTC:CHVKF | Benzinga

Tuesday, October 10, 2023

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