China’s property developers face a hard time accessing U.S. bond markets. Annalisa Di Chiara, a senior VP at Moody’s, informed CNBC, “Squawk Box Asia” on Monday, “We are seeing the trend of China property turmoil continuing to dampen enthusiasm for some high-yield issuance.”
Furthermore, she added that China’s property developers have nearly $35 billion worth of U.S. dollar-denominated debt.
China’s property developers debt crisis?
Annalisa said, If we were to carve out the refinancing needs for those issuers that have already defaulted, that probably carves out about $15 billion out of that $35 billion.”
She added to tight funding circumstances, “it’s going to continue to remain a challenge for some of those issuers to access the U.S. dollar bond market.”
Additionally, the Evergrande debt crisis worsened the woes in China’s property sector. However, even as Evergrande raised money owed more than $300 billion, they still find it challenging to repay collectors.
However, Evergrande has tried to sell their property to ease the money crunch in the past months.
Furthermore, Evergrande shares declined in recent days after its restructuring roadmap upset traders.
Problems in China’s property sector
Annalisa Di Chiara says, “We need to have some of these companies be able to access the U.S. dollar bond market, restore some of their liquidity and again see some stabilization in that property sector.”
China’s property troubles make it harder for developers in the country to access the U.S. debt markets.
Di Chiara said, “I do think that as we go through this restructuring of Evergrande, some of the transparency will start to provide a little bit of a confidence for the investor base.”
Lastly,
As China’s property developers face difficulty accessing the U.S. bond markets, various developers sell off their assets. The China property developers debt crisis has left major developers like Evergrande in a severe cash crunch.