search

The Real Deal Logo

Trending

Housing deal finally passes; here are the detailsHousing deal finally passes; here are the detailsHow Hochul played the “good cause eviction” game, and wonHow Hochul played the “good cause eviction” game, and wonYellowstone drops approximately $200M on 1740 Broadway debtYellowstone drops approximately $200M on 1740 Broadway debtMusklandia: Tesla divorces gigafactory land from city of AustinMusklandia: Tesla divorces gigafactory land from city of Austin
Commercial
New York

China developers owe $13B in USD bond payments this year

Nation has already had a wave of defaults

Shimao Group chairman Hui Wing Mau (Shimao Group, iStock, LoopNet)
Shimao Group chairman Hui Wing Mau (Shimao Group, iStock, LoopNet/Photo Illustration by Steven Dilakian for The Real Deal)

Property developers in China face $13 billion of foreign currency bond payments through the end of this year.

About 60 property groups in China have debt deadlines before the end of 2022, according to the Financial Times, which cited data from Dealogic. The payments due this year make up about 13 percent of the sector’s total outstanding obligations to foreign bondholders.

China’s real estate sector has already had a wave of defaults this year after Evergrande defaulted for the first time in December. Shimao Group, one of the country’s largest developers, defaulted on a $1 billion bond last weekend after failing to pay interest and principal on the debt. Shimao still has about $5.5 billion of outstanding foreign debt.

The defaults are worrying foreign creditors, some of whom are now looking to cash out of their investments amid concern that repayments to domestic investors will be a priority for most of the developers, according to the FT.

Sign Up for the undefined Newsletter

These distressed developers are expected to seek to extend debt maturities, though it’s becoming more difficult for these firms to refinance existing debt given instability across the market right.

A few Chinese developers with properties in the U.S. have faced financial troubles over the last few months. Oceanwide, once an owner of properties and land coast-to-coast in the U.S., recently lost control of its Manhattan development site after failing to pay back $165 million out of a $175 million loan from Midtown-based DW Partners. The company had planned to build a 1,500-foot skyscraper on the land.

Last month, the Chinese parent company of Pacific Park co-developer Greenland USA was downgraded by S&P Global Ratings, which said it was at risk of defaulting on its debt payments.

Read more

Tags
China WatchDefaultOceanwide