Single-B rated Chinese real estate developers raised a total USD 5.40bn from USD-denominated bond issues since the beginning of September 2020 to date (17 November), 36.6% more than the USD 3.95bn raised by BB/Ba-rated developers during the same period. This reverses the trend seen during the June-to-August period and highlights the market’s move down the credit curve as bond yields began dropping towards the end of March.

Between 1 June to 31 August, single-B rated Chinese property developers printed a total of USD 5.42bn in bonds, 44.1% less than the USD 9.69bn amount priced by BB/Ba-rated real estate companies during the same period. During the early part of this period, yields on many single-B rated developers were in high-single to the double-digit territory but they fell as investors took on more risk.

Highlighting the degree of yield compression over recent months, the yield-to-maturity on the JPMorgan Asia Credit Index for Corporate Non-investment Grade was at 7.38% yesterday (16 November) versus 10.68% on 20 March when the index was at its lowest for the year following the outbreak of COVID-19.

As of today, single-B rated Chinese developers have in November raised an aggregate USD 1.57bn via seven bond issues.  Of those seven offerings, five bonds totaling USD 1.30bn were priced between 9-13 November. 

Jason Huang-Jones APAC Data Manager Debtwire