A group of five major Chinese real estate developers have suspended bond issuances of $5.93 billion, as recent defaults has shaken investors’ confidence in the sector.
The most recent case was Hong Kong-listed Zhenro Properties Group, which suspended the issuing of a $620 million bond on June 1st, according to the Shenzhen Stock Exchange. In the last week of May four other notable developers held back on $5 billion worth of bonds.
The suspensions came shortly after Beijing Orient Landscape & Environment Co. failed to hit its fundraising target through a bond issuance. Other companies in the sector fear of similar shortcomings that could signal to investors financial troubles.
Beijing’s deleveraging campaign has made the country’s real estate sector a priority. As of March this year, China’s real estate firms had an average debt-to-asset ratio of 78.7%, reports Caixin, prompting warnings from the government to bring down borrowing.