[HONG KONG] Not even state-owned firms are safe from the deepening rout in Chinese developer bonds.

Sino Ocean Group Holding, part-owned by the finance ministry, has become the latest property company to see its bonds slump. Its 4.75 per cent note due 2030 fell Monday (Nov 8) to as low as 73.48 cents on the dollar, with spreads over comparable Treasuries widening to a record 800 basis points, according to data compiled by Bloomberg.

That's despite the firm being rated investment-grade at two global credit assessors and holding about 54 times more cash and equivalents than China Evergrande Group. Sino Ocean's shares have been doing better, rebounding 35 per cent from their September low. They rose 3.5 per cent Monday.

Stress in the market for Chinese property bonds is reaching extreme levels as surging borrowing costs make refinancing dollar debt too expensive and a slowing housing market shrinks revenue.

China's finance ministry controls just under 30 per cent of Sino Ocean's shares, according to data compiled by Bloomberg. State-owned Dajia Insurance Group - the company that took over most of the operations of troubled Anbang Insurance Group Co - holds a similar-sized stake.

BLOOMBERG

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