Progress in Sunac's restructuring of yuan bonds may pave the way for other Chinese property developers to seek debt agreements next year as the sector acknowledges a prolonged downturn. Many developers face significant bond repayments in 2025 and are considering restructuring options, with Logan Group and CIFI Holdings exploring options. The success of Sunac's restructuring is seen as crucial for these companies.
A man walks past the logo of property developer Sunac at a residential compound in Beijing, China, on Sep 19, 2023. (Photo: REUTERS/Florence Lo)HONG KONG: Progress by Chinese property developer Sunac towards a landmark restructuring deal for yuan bonds could open the gates to a flurry of debt agreements next year, as the sector gives up on returning to financial health anytime soon.
Hit with a liquidity crisis since 2021, China's highly indebted developers began tackling the restructuring of offshore bonds in 2022. But for politically sensitive onshore bonds, they have repeatedly extended maturities, pinning their hopes on a pickup in cashflow. That practice no longer seems viable given the prolonged weakness in housing demand and the broader economy, industry officials and analysts say. Logan Group plans to restructure all of its onshore bonds in 2025, said a person briefed by the company. The Shenzhen-based real estate development firm faces repayments of 2.4 billion yuan (US$330 million) next year, according to LSEG data. It aims to start discussions with bondholders in January and gain approval in March, the person said, adding that the proposal will ask bondholders to take huge losses. Shanghai-based CIFI Holdings, a large property developer due to repay bondholders 3.1 billion yuan in 2025, is also considering a debt revamp, a separate source briefed by CIFI said. But much would depend on whether Sunac is successful in securing a deal, the source added. The sources were not authorised to speak to the media and declined to be identified. Logan and CIFI did not respond to Reuters requests for comment. The two are among many developers with bond payments due next year. For example, embattled Country Garden, the country's No 2 private property developer, is expected to repay onshore creditors 6.6 billion yuan next year. Country Garden, based in Guangdong province, declined to comment on its debt repayment plan
Chinese Property Developers Debt Restructuring Sunac Logan Group CIFI Holdings
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