Offshore bond issuance by Chinese property developers has slowed significantly this year because of the relatively small volume of maturing bonds and the slowdown in land acquisitions by developers, said rating agency Moody's.
"A number of rated developers took advantage of rising share prices in Q2 and opted for share placements, while the opening up of the domestic markets for medium-term notes and corporate bonds provided developers incorporated in China with alternative sources of low cost funding," said Stephanie Lau, Moody's Assistant Vice President.
"The unfolding and eventual default of Kaisa Group Holdings Ltd also weighed on investor confidence in the early part of 2015, resulting in a number of developers putting their planned bond issuance on hold. Looking ahead, we expect that offshore issuances by our rated developers will continue to slow in the next half of 2015," added Lau.
In the first half of 2015, 12 developers rated by Moody's issued offshore bonds totaling around 6.7 billion U.S. dollars, compared with 15.5 billion U.S. dollars raised by 29 rated developers in the first half of 2014.