Chinese developers turning to onshore perpetual bonds

[HONG KONG] Chinese property companies are quietly turning to onshore perpetual bonds to side-step rules limiting their ability to take on billions of dollars of additional debt.

The unusual hybrids show that China's capital-hungry developers are driving innovation in the country's domestic markets as they widen their search for alternative funding. Critics, however, argue that the practice lacks transparency and could add to the risks for other investors at a time when slowing property sales and tightening credit conditions are adding to fears of defaults.

Evergrande Real Estate Group and Beijing Capital Land reported in recent annual results announcements that they had privately placed perpetual securities in China's domestic market last year.