Greenland bonds plunge after Chinese developer seeks extension

GREENLAND Holdings, China’s 11th-largest builder, is seeking investor approval for a possible bond-repayment extension, triggering fresh concerns about its financial health.

The Shanghai-based real estate firm has asked holders of a US$488 million dollar note due June 25 to approve certain amendments and waivers that include a maturity extension, according to a filing to the Hong Kong stock exchange Friday. Fears over a possible extension had triggered record drops in the firm’s imminently maturing notes the previous day. 

Greenland, which has a presence in 30 countries, is the latest property firm to show signs of rising stress as developers deal with a record wave of defaults. The company was previously seen as relatively immune to the clampdown on China’s debt-saddled real estate sector, in part because it’s viewed as a quasi state-owned enterprise. Builders have been scrambling to extend deadlines or exchange maturing notes to avoid an outright default as key channels of funding remain closed off to many builders. 

The 6.75 per cent dollar bond Greenland is looking to extend fell a further 31.5 cents on the dollar to 39.1 cents Friday morning, after tumbling 18.9 cents the previous day, Bloomberg-compiled prices show. 

S&P Global Ratings downgraded Greenland by two notches to B- this week and put the firm on watch for further cuts. It cited uncertainty over the developer’s ability to dispose assets and generate internal resources to repay offshore debt due the next three to six months. Moody’s Investors Service expressed similar concerns in its own downgrade earlier this month. BLOOMBERG