Struggling Chinese property developer Kaisa has two important payment deadlines on Friday, another major focus of global investor concerns that have been heightened by a steep sell-off in property groups’ offshore debt, reports the Financial Times. S&P lowered its rating of the company, which has $88m in coupon payments due by Friday, to triple C minus, saying it “may not be able to service its debt in time” and pointing to a potential debt restructuring.
Kaisa is the property sector’s second-largest borrower on international high yield markets, behind the embattled China Evergrande Group, and asked investors for more time after payments were missed on wealth management products it guarantees.
The Kaisa deadlines are the latest strain on the Chinese property sector, which is reeling from a liquidity crisis following a severe sell-off in developers this week that pushed borrowing costs on riskier offshore bonds to their highest level since the financial crisis.
“Based on Kaisa’s recent statements, it seems probable that it will enter the grace period for its USD coupon due today,” said Paul Lukaszewski, head of corporate debt for Asia-Pacific at Abrdn.