Bond issues by Chinese real estate firms tank

Dollar-denominated bonds issued by Chinese real estate companies are the worst performers in Asian non-financial corporate debt, Bloomberg reported. Yields on bonds issued by seven Chinese firms including Kaisa Group Holdings (1638.HK) and Country Garden Holdings (2007.HK) have widened their gap relative to US Treasury bonds by 2.26 percentage points since January. As Beijing cracks down on lending, investors are demanding higher yields from Chinese developers. Goldman Sachs and Credit Suisse have cut their profit estimates for Chinese real estate companies following a 12.8% rise in real estate prices in April which provoked commitments from the government to cool the market. The yield spread on bonds sold by Kaisa widened the most to 16.52 percentage points up from 11.07 percentage points.