Chinese debt mounted real estate developers see more cuts in credit ratings by Moody’s, Fitch and S&P Global amid slump in property sales.
The credit rating agencies in combination has cut ratings of the Chinese property developers 91 times until last month which by large margin exceeds the number of rating upgrades. The credit rating cuts is the highest in five year.
Property developers in the country are under close watch of global traders given Evergrande missing payments on dollar bonds in multiple occasions to Fantasia in breach of exchange regulation after two independent directors out of required three resigned.
Sinic Holdings Group (2103 HK) has spurred contagion fears after it announced in an exchange filing it does not expect to pay $250 million dollar bond due on October 18 with chances of cross-default on its other notes.
Trading of the firm has been suspended and its stock had already dipped down by 87% after it missed domestic note payment last month.
Investors are only ticking their counter wondering who’s next.
However, Beijing silence sent a sound message to the global community that President Xi’s administration will not come to bail out since it would undermine his administration’s campaign of “common prosperity”.