In a note on Friday, March 18, Goldman Sachs analysts said that Chinese high-yield property issuers have defaulted around a quarter of their outstanding bonds this year, arguing tight liquidity as well.
According to Reuters, Kenneth Ho, and Chakki Ting, Goldman Sachs analysts, “If we assume all the bonds from issuers that have entered into bond exchange or maturity extension transactions as being in default, the (year-to-date) default rate would rise to 23.4%.”
So far this year, the bonds in the sector that have reached their final maturity, 31% have entered into bond swaps or maturity extensions, 26% have defaulted, and 42% have been fully refunded.
With $2.3 billion maturing in April and more than $3 billion each in June, July, and August, they expect more bond exchanges and defaults.
Amid liquidity stress in the real estate sector, Yango Group Co., a Shanghai-based firm within the top 20 Chinese developers, missed payments for a total of $121.92 million, as reported by Bloomberg.
China Construction Bank said that Yango Group Co. defaulted on a 94.62 million dollars onshore bond due Tuesday, March 15.
Yango Group contracted sales for 2021 were the 19th highest in the country. The developer operates in over 100 Chinese cities.