A Chinese state-linked developer long considered among the nation’s most resilient has been cut to selective default by S&P Global Ratings, as fallout from a property debt crisis spreads, reports Bloomberg. Greenland Holding Group was downgraded from CC, after recently extending repayment by a year on a $488 million bond that had been due June 25.
While the builder said last week that it had received sufficient support from noteholders for the extension, investors have remained concerned about its longer-term health amid a broader industry downturn. The Shanghai-based firm would likely have lacked the funding to repay the notes without the extension, S&P analysts including Jay Lau wrote in a report on Wednesday. “We view the transaction as a distressed debt restructuring tantamount to a default,” they said.
China’s 11th-largest developer by contracted sales is partially owned by local government entities. The company rocked the market in May when it proposed to reschedule the debt payment. The move spurred worries over the extent and scope of future state support for troubled real estate firms after authorities clamped down on the debt-saddled sector.