Chinese property developers face a payment wall of $13.3bn in H2 2022, as per data from Dealogic. This accounts for ~13% of the sector’s over $100bn in outstanding dues to offshore bondholders. With defaults being prevalent, including the latest by Shimao Group, concerns have only risen on the ability of developers to make good on their payments. FT reports that many analysts expect distressed developers to seek debt extensions since market conditions have become very tight, making refinancing difficult. In recent times, foreign creditors have also raised concerns about onshore investors being privileged over foreign bondholders, especially with structural subordination risk in place.
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Separately, adding to the woes in the sector, Times China and Helenbergh were downgraded to Caa1 and B- respectively. To see the complete rating action, scroll up to the ‘Rating Changes’ section.