More than 60 Real Estate Companies in Communist China Have $13.3 Billion in Debt Maturities

Although Communist China’s central government and the local government have frequently released bullish incentives recently to stimulate the atrophied real estate market, the precedent of Evergrande Group’s treaty violation is very likely to happen again.

Shimao Group reportedly defaulted on a $1 billion bond on the 2nd, which had made investors increasingly worried, Financial Times reported. However, Shimao Group isn’t the only one facing default. The data from consulting firm Dealogic shows that more than 60 Chinese real estate companies with a total of about $13.3 billion in debts will mature by the end of this year, while Shimao’s outstanding debts will be $5.5 billion.

Financial Times reported that Chinese property developers have to pay back up to $13.3 billion in foreign currency bonds in the second half of this year, highlighting the increasing number of defaulting real estate companies and the outlook for Communist China’s property market is gloomy.

Chinese real estate companies have been the major issuers in Asia’s high-profit dollar debt market for a long time. The defaulted Shimao bonds traded at just 12 cents per dollar of face value last week. That shows the property developer is under tremendous financial pressure, and last week wasn’t even the deadline for Shimao to pay back its foreign currency debt.

If Shimao cannot pay back on time, the list of troubled Chinese real estate companies will add one more. Previous defaulting owners include Sunac and China Evergrande. The latter’s domestic and overseas debt add up to more than $300 billion.