Chinese developers spook investors as CIFI halts bond payments after Longfor, Country Garden roil markets
- CIFI Holdings Group is suspending payments on its offshore bonds and terminating discussions with creditors
- Global rating agency Fitch downgrades Country Garden, while Longfor deals with fallout from chairwoman’s resignation
The situation in China’s housing market is deteriorating further, with three developers once regarded as healthy survivors – CIFI Holdings Group, Country Garden, and Longfor Group Holdings – raising increasing concern among investors.
Shanghai-based CIFI said on Tuesday morning that it will suspend payment on all of its offshore bonds and has terminated all discussions with individual creditors and creditor groups offshore, according to a filing with the Hong Kong stock exchange.
“In order to ensure fair and equitable treatment of all offshore creditors, the group has suspended payment of all principal and interest falling due on the group’s offshore financing arrangements,” the developer said in the filing.
“We see [the suspension] as negative for CIFI’s share price and believe it will soon go for extension of its offshore debts, like what its peers have done,” said Will Chu, Hong Kong and China property researcher with CGS-CIMB Securities (Hong Kong). “Its monthly contracted sales could deteriorate further in the next few months following its liquidity issues.”