Tuesday, September 16, 2025

Chinese Junk Bond Yields Soar to Decade-High as Property Developers Continue to Miss Payments

Borrowing costs for Chinese property developers were sent soaring over the past month, as international concerns over missed bond payments ripple across markets.

Investors offloaded their junk bond holdings of speculative-grade Chinese developers this week, sending borrowing costs to the highest in over a decade and further impeding the ability for cash-strapped companies to access dire liquidity. According to data from Ice Data Services and cited by the Financial Times, the average rate on Chinese high-yield dollar bonds surged from 14% in September to nearly 30% this week, bringing borrowing costs for China’s real estate sector to the highest since the 2008 financial crisis.

The demand for dollar-denominated debt from Chinese companies affixed with a speculative-grade credit rating has plummeted as of recent, after a string of missed bond payments from a number of major real estate developers left both domestic and foreign investors wary. The sharp increase in borrowing costs, coupled with regulatory pressure to cut back on debt, has made it even more difficult for companies such as Evergrande, Sinic, and Fantasia to access cash and avoid defaults.

Evergrande, which has been at the centre of China’s property crisis, once again narrowly avoided default after it made a $148.1 million interest payment on three dollar-denominated coupons literally minutes before the 30-day grace period was set to expire on Wednesday. Evergrande is far from the only company bouncing from one grace period to the next, though, with Kaisa— one China’s largest borrowers in the real estate sector— this week begged bondholders for “more time” to shore up liquidity after missing interest payments on two offshore bonds.

“I think probably we’re going to see more defaults down the road, and more contagion to other developers,” explained Macquarie chief China economist Larry Hu. “I don’t think they can issue bonds anywhere right now.” According to data from Dealogic, Chinese developers have raised total of $320 million from foreign bond sales since the beginning of the fourth quarter, which is significantly less than the billions of dollars that are typically raised during the period.

In a further testament of the severity of economic implications stemming from the collapse of China’s real estate sector, Beijing has decided to loosen recently-imposed restrictions on borrowing. As reported by the Securities Times on Wednesday, some property developers may soon be able to tap into interbank markets for cash in an effort to alleviate pressures from the bond selloff in offshore markets.

Information for this briefing was found via the Financial Times and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

New Found Gold: The Strategic Maritime Resources Purchase

Amex Exploration: Revised Perron PEA Has INSANE Economics

Aris Mining: The Multi Billion Dollar Soto Norte PFS

Recommended

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Goliath Resources Hits 18.58 g/t Gold Over 5.00 Metres At Surebet

Related News

China Junk Bond Yields Continue to Hit New Highs; Equity Investors Yawn

Over the last eighteen months, equity investors have concluded that the stock market is a...

Saturday, October 9, 2021, 09:00:00 AM

US Existing Home Sales Unexpectedly Fall for Third Straight Month

Sales of existing homes fell for the third consecutive month in April, as low inventories...

Sunday, May 23, 2021, 05:03:00 PM

Mortgage Rate Spike Threatens to Derail US Housing Boom

The pandemic sparked a real estate boom that was fuelled by record-low mortgage rates, work-from-home...

Wednesday, March 3, 2021, 10:31:00 AM

US Housing Starts and Applications Climb by Record Levels in July

It appears that housing starts and applications in the US significantly surpassed expectations, suggesting that...

Tuesday, August 18, 2020, 11:51:00 AM

Investors Begin To Dominate Ontario’s Real Estate Market

Data from Statistics Canada for the year 2021 has shed light on the substantial ownership...

Thursday, October 19, 2023, 11:43:34 AM