Real estate contagion watch continues with more defaults and downgrades

Business & Technology

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If contagion amounts to a crisis of confidence in property markets, then credit ratings are one helpful way to measure big real estate developers’ trustworthiness. Spoiler alert: it’s not looking good.

  • Chinese developers are being downgraded at the fastest pace since 2016. Moody’s, Fitch, and S&P have cut ratings 91 times so far this year, a new record.
  • Fantasia’s post-default implosion continues as two directors stepped down, potentially leading to a Hong Kong delisting due to the bourse’s governance rules.
  • More real estate firms are becoming insolvent: Sinic Holdings joined the ranks of developers facing default, announcing it can’t repay a dollar bond due Monday.

Also relevant: As the government cleans house on indebted companies and discourages binging on debt, it’s also probing investment funds and financial regulators to weed out officials who have “become too chummy with private firms,” according to WSJ.