Evergrande is on the edge of default. Getty Images/STR/
China's property developers have grown at a breakneck pace over the past decade, fueled by large amounts of debt. Although authorities have begun to curb their debt with strict limits, it is difficult to break an addiction.
Evergrande, which owes more than $300 billion to China, is one of the largest property developers in China. It is creaking under pressure and has failed to make several offshore bond payments.
Evergrande wired $83.5million Thursday just before the 30-day grace period expired to pay interest on an off-shore dollar bond. It faces additional deadlines regarding missed bond payments and $45.2million in interest due later in October. It will be declared in default if Evergrande does not pay its obligations.
The Evergrande crisis has spread to other developers, and is threatening to shake China's real-estate sector, which economists estimate accounts for around 30% of China's economy.
Pan Jun is the chairman of Fantasia. South China Morning Post/Getty
Fantasia, a mid-sized developer, is perhaps the most alarming default to date. According to a filing, it did not pay the $206 million bond due to mature on October 4.
It was concerning because the company had assured investors just two weeks prior that there was no liquidity problem, according to Craig Botham, Pantheon Macroeconomics chief China economist.
He said that "a great deal of Chinese developers are in more vulnerable positions than their balances might suggest."
According to Bloomberg data, Fantasia's revenue in 2019 was $2.76 billion. Evergrande's revenue was $69.15 billion.
Sinic Holdings failed to pay a bond payment Monday. China News Service/Getty Images
Bloomberg reported that Sinic Holdings defaulted Monday on interest and bond payments of $250 million. Another mid-sized property developer, Sinic Holdings, had revenue of $3.91 Billion in 2019.
Evergrande-related stress has slowed property sales and increased borrowing costs. This has put pressure on Sinic.
This month, the yield on riskier Chinese dollars bonds, which are large sources of financing for developers, soared up to 20%.
Fitch Ratings downgraded Sinic on Thursday to "restricted default".
CPG's managing director is Wong Sai Chung. South China Morning Post/Getty
China Properties Group
China Properties Group is smaller than Sinic but is still in trouble. In a filing to the Hong Kong stock exchange, it stated that it had defaulted in October on bonds totalling $226 million.
UBS predicts that developers will not see much relief this year. UBS analysts stated Monday in a note that they expect new property starts to fall 20% year-over-year in the fourth-quarter, "which will further reduce the economy's resilience."
Modern Land is another developer under threat. Zhang Peng/Getty
Modern Land requested that the $250 million bond be deferred for three months. It stated that it was seeking to avoid any defaults and wanted to do so in October.
The plans were scrapped by the small developer who owns 200 office and apartment properties in China. According to a filing, it stated that it faces liquidity problems and is looking for financial advisors.
Modern Land's chairman and president have announced that they will invest approximately $123 million in the company.
Xinyuan was forced to enter a distress debt swap. Johannes Eisele/Getty Images
Xinyuan Real Estate
Xinyuan was under pressure and decided to swap $208 million worth of dollars bonds for debt that will mature in two years in a distressed-debt market.
Fitch awarded Xinyuan a score of "CC" on Wednesday. This means that Xinyuan is likely to default. Fitch stated that the mid-sized developer is in a tight liquidity situation with limited funding access and large offshore bond maturities over the next 12 months.
Greenland is one of the largest property developers in China. STR/Getty Images
Greenland Holding Group
S&P Global Ratings downgraded Greenland earlier this month. This is a huge developer that had revenues of $61.98 million in 2019. It was given a "B+" rating, meaning that it is able to repay its debts at the moment but is susceptible to shocks.
Greenland is in trouble as its borrowing costs rise during the Evergrande crisis. Foreign and domestic investors are less willing to lend to property companies.
S&P stated that the company's cash could continue its decline over the next twelve months because of weaker sales and less cash collection.
Insider reached out to all of the property developers listed in this article, but no response.