A potential move by China’s top planning body could place the country’s property developers under increased financial stress as they battle with rapidly rising borrowing costs.
The National Development and Reform Commission has reportedly told the market that it is looking at stricter regulations for companies hoping to roll over their offshore debt issuance quotas to next year, forcing them to borrow now rather than in a friendlier market climate.
China’s developers have sold $37 billion of dollar bonds so far in 2018, with 65% let go in the first half, according to Bloomberg data. Average yields on such securities, however, have ballooned to a four-year high of 11.8%.
Bloomberg estimates that the industry still holds $62 billion of bonds in both onshore and offshore markets due to mature in 2019.