Hidden risks rise for China developers' bonds

Hong Kong

CHINA'S developers are scrapping safeguards written into their bonds, sparking concern that they are attempting to hide rising debt loads after a landmark default.

Five developers this year have loosened or are trying to relax financing limits and make it easier to enter joint ventures that can move liabilities off their balance sheets. That's up from three in the same period of 2014. Junk-rated issuers including Agile Property Holdings and Modern Land China have sought to trim protections for overseas investors, dragging them to the weakest since 2011, said Moody's Investors Service.