Chinese property developers have over $292bn of onshore and offshore debts due through the end of 2023, as per data from Bloomberg and Use Trust. These debts include loans, trust loans and bonds denominated in local currency and foreign currency. With a large chunk of defaults already seen in 2022, pressures only increase further next year beginning with the first quarter when $72.3bn is due. Henry Loh, head of Asia fixed income at abrdn says, “If we draw parallels from 2022, a lot of the stress began because of the seasonality of payments toward the first quarter. So undoubtedly, the payment pressure in the first quarter of 2023 will add more stress”. Looking at maturing debts alone, the sector has $238bn due next year, down 25% from 2022. However, weaker liquidity and tight capital market conditions have increased risks of more defaults.
Separately, as per Caixin news, state-owned credit support provider China Bond Insurance Co. is expanding its debt guarantee program to about 12 property developers to issue RMB 20bn ($2.75bn) in bonds. The move is among the measures Beijing has adopted to try supporting the embattled property sector. While the names of the developers are not known, Caixin notes that the NAFMII and China Real Estate Association summoned 21 developers to update progress on its previous guarantee program launched in August.