Default risks rise in $491b China builder bond market
Investors are bracing for more debt defaults among China’s cash-squeezed real estate developers as funding costs surge and refinancing pressure intensifies.
Borrowing costs in dollars for China’s high-yield issuers, most of whom are property developers, almost doubled this year to 11.2 per cent, the highest in about four years, ICE BofAML indexes show. To make things worse, the sector faces a record $US18 billion ($24 billion) bond maturities in both onshore and offshore markets in the first quarter of 2019. That number is expected to double if investors demand early repayment on some of these notes, according to compiled data.