HONG KONG (Reuters) – Shanghai-based developer Shimao has put all its projects on sale, local media reported on Monday, and more Chinese property firms suffered credit rating cuts, leaving markets torn between hopes a stifling cash crunch will begin to ease and fears of a surge in defaults.
Chinese property developers are facing an unprecedented liquidity squeeze due to regulatory curbs on fresh borrowing, leading to a string of offshore debt defaults, credit-rating downgrades and sell-offs in developers’ shares and bonds.
The cash crunch for the sector, which is one of the main contributors to the China’s economic output, is expected to intensify in the days ahead with a wall of repayment obligations looming in the next few months.
China Evergrande Group, the world’s most indebted developer at the centre of the sector’s debt crisis, is seeking a six-month delay in the redemption and coupon payments of a 4.5 billion yuan ($157 million) bond.
Developer Shimao’s fire sale, new rating cuts keep China property on edge
The outcome of the company’s proposal after a Jan. 7-10 meeting with http://www.onedayloan.net/payday-loans-ar the bondholders is expected by Jan. 13 after the developer said in a filing it had extended the voting period.
Evergrande is struggling to repay more than $300 billion in liabilities, including nearly $20 billion of offshore bonds deemed in cross-default by ratings agencies last month after it missed payments.
“It’s going to be the peak of repayment period and we’ll see more developers default,” said Kington Lin, managing director of Asset Management Department at Canfield Securities Limited.
Shimao Group Holdings, which defaulted on a trust loan last week, has put on sale all of its real estate projects, including both residential and commercial properties, Caixin reported over the weekend.