The debt crisis in China’s property sector has sparked a record wave of defaults. As a result, more issued bonds from developers have fallen to distressed levels. And the debt crisis is spreading to high-rated issuers.

Greenland Holdings has long been seen as a resilient and stable developer. But last week, it surprised all investors after asking to extend its bonds.

Earlier this month, China’s fourth-largest developer, Sunac, failed to pay interest on a dollar bond before the grace period ended. Thus it has become another major developer in China to have outstanding debt amid a record wave of defaults.

Some analysts said that most Chinese private property companies might not be able to repay their debts at the due date without new financing.

Besides, lockdowns across Shanghai and other Chinese cities have put a lot of pressure on revenue. As a result, Goldman Sachs raised the default rate of high-yield Chinese real estate bonds in 2022 from 19% to 31.6%.

And according to Bloomberg, these five Chinese-funded real estate companies have raised alarms.

Shimao

The luxury builder is China’s 20th-largest developer. It was considered among one of the country’s healthier property firms.

However, when the broader industry crisis worsened, investors became concerned about the company’s liquidity, and the company’s investment-grade ratings were lost. As a result, Shimao’s main onshore unit tried to postpone repayment on an onshore public note for the first time this month.

This year, Shimao, by contracted sales, has $2.1 billion in bond payments to make it through the rest of 2022, including a $1 billion note due on July 3. Also, because it hasn’t reported last year’s results, its shares in Hong Kong have been halted since the beginning of April.

Logan

Logan has been in the spotlight due to worries about the builders’ undisclosed leverage. In the last two months, two major credit rating organizations have withdrawn their ratings on the builder. This is part of a wave of similar moves in the industry this year. In addition, the corporation asked its auditor to retire earlier this month because it could not meet a deadline for the 2021 audit.

Logan has a 1 billion dollar note payment planned for the rest of the year, including August’s almost 280 million dollar bond. The stock of China’s 22nd largest builder has stopped trading since May 12 due to a lack of audited results.

Ronshine China

In February, China’s 23rd largest builder attracted attention when its dollar securities plummeted along with a slump at Zhenro Properties Group Ltd. The founder of Zhenro is Ronshine China Chairman Ou Zonghong’s brother. But unlike Zhenro, Ronshine China hasn’t had to seek debt exchanges and hasn’t missed any note payments.

This year, Ronshine has almost 940 million dollars in bond payments, most of which is a nearly 690 million dollar note due in October. In addition, during the recent earnings season, Ronshine’s auditor resigned, and the company’s 2021 report will likely be revealed soon.

Agile

When it comes to Agile, which builds villa apartments and high-rise residences amid beautiful gardens, investors are split on the immediate and long-term dangers. After some recent loan payments, the price of its August bonds soared above 80 cents on the dollar. The company’s other offshore notes, on the other hand, range from 23 cents to 39 cents, indicating longer-term concerns.

Agile, China’s 28th largest construction company, has 1.16 billion dollars in bond obligations due through years-end, including 600 million dollars in principal on August notes and a 225 million dollars security owing in July. As a result, its stock touched a 13-year low earlier this month.

Powerlong Real Estate

Following the city-wide lockdown, the Shanghai-based developer’s notes have been among the poorest performers in May. Powerlong, which also builds commercial projects and owns retail malls, is ranked 43rd in contracted house sales this year.

It owes more than 690 million dollars in onshore and offshore bond payments through the end of the year, including a 200 million dollars note due on July 25.

Earlier this year, the company did repurchases and redemptions. However, market pricing has recently shown persistent anxiety, with the July offshore note returning to 50 cents on the dollar and most others falling below 30 cents. In addition, on Friday, a Powerlong unit announced that it would not redeem an almost 75 million dollars perpetual note. This would cause a three-percentage-point increase in the bond’s coupon.

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