China Property Watch: Tough Operating Conditions Could Further Polarize Developers

China Property Watch: Tough
Operating Conditions Could Further

Polarize Developers
Primary Credit Analyst:
Bei Fu, Hong Kong (852) 2533-3512; bei.fu@standardandpoors.com
Secondary Contacts:
Matthew Kong, Hong Kong (852) 2533-3595; matthew.kong@standardandpoors.com
Christopher Lee, Hong Kong (852) 2533-3562; christopher.k.lee@standardandpoors.com
Dennis Lee, Hong Kong (852)2533-3563; dennis.lee@standardandpoors.com
Laura C Li, CFA, Beijing (86) 10-6569-2930; laura.li@standardandpoors.com
Christopher Yip, Hong Kong (852) 2533-3593; christopher.yip@standardandpoors.com
Table Of Contents
Contracted Sales Update And Prospects
Financing Conditions Will Be Toughest For Small Players
Bond Issuances Will Slow Somewhat
Aggressive Land Acquisitions
Implementation Of Policy Measures Remains Key To Sales Performance
Appendix
WWW.STANDARDANDPOORS.COM/RATINGSDIRECT JUNE 8, 2014 1
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China Property Watch: Tough Operating
Conditions Could Further Polarize Developers
(Editor's Note: This is the second of a quarterly series on Chinese property developers.)
Chinese real estate developers might have to strike a fine balance between achieving higher sales targets and
maintaining prices as the property market cools. This might be particularly hard, given that developers have set
aggressive sales target for 2014 and operating and financing conditions will likely weaken from their favorable
positions in 2013. Sales on a national level have been dismal so far this year. Compared with 26.6% growth in 2013,
residential property sales in China declined 10% from January to April 2014, according to National Bureau of Statistics.
At the same time, average selling prices are weakening. In May 2014, housing prices increased in only 44 of the 70
major cities that the government tracks, the lowest since January 2013.
Standard & Poor's Ratings Services expects that sales volume will gradually begin to improve from the second half of
2014 as Chinese property developers cut prices to boost sales. Thanks to their strong cash balance at the beginning of
the year, most Chinese developers that we rate have been slow to lower prices so far this year. But these developers
will be under greater pressure in the second half of the year to generate cash flows and meet their ambitious sales
targets. On average, rated developers set a target that is 20% higher than the actual sales in 2013, which was a year of
historically high sales for most companies.
With some relaxation of the sector and credit policies, strong supply and ongoing demand from owner-occupiers will
support some recovery of sales volume, in our opinion. But prices are likely to continue to slide because of large
inventory in some markets. Therefore, we adjusted our base-case assumption to reflect our expectation that the
average selling price (ASP) will fall 5% in 2014 compared with a rise of 11.5% in 2013. During the previous downturn
in 2011-12, ASP declined less than 3%, according to China Real Estate Index System (CREIS). The price correction
could be more severe this time given the high base in 2013. We assume a 5% decline in ASP would support 10%
volume growth, given large supply. Overall, our base case factors in a 5% year-on-year growth of sales. This compares
with about 10% growth in 2011 and 2012, and 27% in 2013.
Despite the weakening operating conditions, we believe the credit trend for rated developers will be neutral this year
as our recent rating actions--some positive and some negative--already reflect. We expect most large national players
to be able to weather the market correction ahead. Most rated developers are listed and we view them as
midsize-to-large companies. Among the rated developers, companies with more aggressive debt-funded growth
appetite or weak execution ability will face downgrade risks. We expect sales and financing prospects to be gloomy for
smaller players, especially the unrated ones, some of who may default or be acquired by others.
Margin compression will be a structural trend for the sector as land costs outgrow selling prices. We expect the healthy
players to sustain a gross margin of 30% over the next two to three years. Operating and cost efficiency will become
competitive factors as product differentiation becomes increasingly more difficult. Companies with brand loyalty and
geographic and product diversification will be able to better weather through downcycles.
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Contracted Sales Update And Prospects
Contracted sales were off to a slow start this year. The 27 rated developers that report monthly performance had
achieved just 27% of their full-year target from January to April (see table 1). We view this figure as still reasonable
because companies' full-year targets are generally aggressive, and sales in the first quarter of the year are usually
slow in China because of the Chinese new year holidays and cold weather in the northern provinces.
Table 1
Contracted Sales Performance Of Select Rated Developers
2013 budget 2013 actual 2014 budget 2014 actual* 2014 actual*/2014 target
--Bil. RMB--
China Vanke Co. Ltd. 166.0 170.0 200.0 67.0 33.5%
Poly Real Estate Group Co. Ltd. 120.0 123.5 160.0 36.4 22.7%
China Overseas Land & Investment Ltd. 80.0 109.6 111.6 36.3 32.5%
Country Garden Holdings Co. Ltd. 62.0 106.0 128.0 41.1 32.1%
Evergrande Real Estate Group Ltd. 100.0 100.4 110.0 44.4 40.4%
China Resources Land Ltd. 57.0 68.1 70.0 13.7 19.5%
Shimao Property Holdings Ltd. 55.0 67.1 80.0 18.0 22.5%
Greentown China Holdings Ltd. 55.0 62.1 65.0 17.2 26.5%
Sunac China Holdings Ltd. 34.0 54.7 65.0 14.3 21.9%
Longfor Properties Co. Ltd. 46.0 48.1 57.0 12.6 22.1%
Gemdale Corp. 40.0 45.0 60.0 10.0 16.7%
Guangzhou R&F Properties Co. Ltd. 42.0 42.2 70.0 19.0 27.1%
Agile Property Holdings Ltd. 42.0 40.3 48.0 13.2 27.5%
Kaisa Group Holdings Ltd. 23.0 23.9 28.0 6.2 22.1%
Future Land Development Holdings Ltd. 20.0 20.6 24.0 5.6 23.2%
KWG Property Holding Ltd. 16.0 16.3 21.0 6.9 32.6%
CIFI Holdings (Group) Co. Ltd. 14.0 15.3 22.0 6.8 30.9%
Franshion Properties (China) Ltd. 18.0 14.6 30.0 3.4 11.5%
Central China Real Estate Ltd. 13.0 14.0 17.0 3.0 17.3%
China Overseas Grand Oceans Group Ltd. 13.0 13.6 18.5 3.0 16.2%
Hopson Development Holdings Ltd. 15.0 11.3 14.0 1.2 8.7%
Yuzhou Properties Co. Ltd. 9.0 11.0 13.0 2.9 22.3%
China SCE Property Holdings Ltd. 8.0 10.8 14.0 3.9 27.7%
Fantasia Holdings Group Co. Ltd. 10.0 10.2 15.0 0.9 6.3%
China Aoyuan Property Group Ltd. 9.0 10.0 15.0 2.6 17.3%
Powerlong Real Estate Holdings Ltd. 8.0 9.4 12.0 2.0 16.8%
Mingfa Group (International) Co. Ltd. 9.0 6.3 8.0 0.7 8.6%
Total 1,084.0 1,224.4 1,476.1 392.3 26.6%
*Contracted sales from January to April. RMB--Chinese renminbi. Source: Company announcements.
Nationwide, year-on-year sales fell close to 10% demonstrating the weaker capability of the smaller players (see
chart 1).
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China Property Watch: Tough Operating Conditions Could Further Polarize Developers
Chart 1
According to CREIS, month-on-month growth of ASP in the top 100 cities has moderated since November 2013 and
turned negative in May for the first time in 23 months. Year-on-year growth had slowed to 7.8% until May from
11.5% at the end of 2013. However, ASP continued to grow faster in top-tier cities than the rest of the market. ASP
in the top 10 cities had grown 13.9% until May (see chart 2).
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Chart 2
Uncertain credit conditions have tempered the sustainable demand stemming from urbanization and higher
disposable incomes. More expensive mortgages and lack of mortgage availability have prevented some buyers from
entering the market. Some potential purchasers have adopted a wait-and-see attitude to take advantage of declining
prices. In our view, as long as financing conditions improve for home buyers, owner-occupier demand will support
property sales.
Large supply will weigh on the market this year, particularly in areas with lower end-user demand, such as in some
third- and fourth-tier cities. According to Shanghai Yiju Real Estate Research House, close to 20 cities have
inventory of more than 15 months. These cities include Tianjin, Hangzhou, and Shenyang. Wenzhou tops the list
with inventory of 42 months. Most rated developers have abundant available-for-sale properties this year.
Overall sales should gradually pick up. Developers have greater incentive to achieve higher sales even at the cost of
lower prices. Recent initiatives by central and local governments to back mortgage lending and loosen
property-related policies will also support sales growth. In our base case, we expect a 10% increase in sales volume
for Chinese developers, representing a slower rate but from a strong base last year.
Our base-case scenario of a 5% decline in ASP in 2014 reflects our view that the rapid growth in ASP in 2013 is not
sustainable and will continue to deteriorate over the year as the pressure to cut prices increases. ASP in the overall
market grew 11.5% in 2013, with a more than 20% increase in some tier-one cities.
Only companies with good sales execution, right product and geographic coverage, and access to low-cost
financing will benefit from a recovery in sales, in our view. For the others, especially the large number of small
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developers, most of which are unlisted and not rated, cash sales may slow at a time when access to financing is
uncertain. This could put pressure on these companies' liquidity.
China's property market is not geographically homogeneous. While we believe tier-one and tier-two cities will
remain more resilient to a market correction, lower-tier cities with large supply and limited demand may face
challenges even if the government eases purchase restrictions.
Financing Conditions Will Be Toughest For Small Players
Funding costs will increase and the availability of funding from banks and the bond market will tighten in 2014.
Offshore bond issuances were at historically high volumes and low costs in 2013. The availability of financing from
banks and bond issuances could be limited to the larger and more reputable developers. Smaller players that can't
raise funds through these channels would be at a disadvantage. They will have to rely on other sources of funding,
such as shadow banking products, which could be more expensive and have uncertain refinancing prospects.
The availability and cost of financing from shadow banking will be questionable. A regulatory crackdown on shadow
banking and defaults on some trust products earlier this year suggest such financing may not be sustainable and
costs could rise quickly and considerably. So far, interest costs remain reasonable for most rated developers
compared with their peak in 2011. More companies borrow through trusts and entrusted products to subsidize or
substitute bank borrowings. Such funding channels allow for a more flexible use of money and do not constitute a
bank's lending quota. Among other reasons, the tighter availability of mortgages and delayed release of funds are
responsible for slow sales. The decision of some banks in some cities to scrap the preferential mortgage rate for
first-time home buyers has also contributed to slow sales.
It seems that the central government could be considering releasing more liquidity into the system through several
measures, such as the required reserve ratio. But the government is likely to walk a fine line between being cautious
and supportive. On the one hand, it doesn't want a repeat of the overnight rebound of the property sector as in
2008-2009. On the other hand, the government can't afford to allow the sector to remain weak for a prolonged
period given its importance to the economy.
M2 growth rate remains largely stable but at the low end of 13% (see chart 3).
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Chart 3
Mortgage loans continue to grow, but at a slower pace (see chart 4).
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Chart 4
Growth in property development loans peaked in the third quarter of 2013. It has since moderated to close to 16%
in the first quarter of 2014, reflecting a slowing of developers' construction activity (see chart 5).
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Chart 5
The growth rate of trust lending to the sector bottomed in late 2012 and continued to rise until its recent high of
about 50% (see chart 6).
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Chart 6
Bond Issuances Will Slow Somewhat
We expect the bond market to remain open for rated Chinese developers with a good track record. But the pace of
issuance could be slower and costs could be higher partially due to softer property and capital markets. Bond
issuances have totaled more than US$10 billion so far in 2014, compared with more than US$20 billion in full-year
2013, a record year for bond issuances in the real estate development sector (see table 2).
Table 2
Coupon Rates Of Bond Issues In 2014 Versus Previous Issuances
2014 issuance Previous issuance
Company Amount (mil.) Tenor
Coupon rate
(%) Amount (mil.) Tenor
Coupon rate
(%)
Agile Property Holdings Ltd. US$500 5 8.375 US$700 Perpetual 8.25
RMB2,000 3 6.5
China Aoyuan Property Group Ltd. US$300 5 11.25 US$100 4 13.875
Central China Real Estate Ltd. S$200 3 6.5 S$175 3 10.75
CIFI Holdings (Group) Company
Ltd.
US$200 5 8.875 US$225 5 12.25
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Table 2
Coupon Rates Of Bond Issues In 2014 Versus Previous Issuances (cont.)
China Overseas Grand Oceans
Group Ltd.
US$400 5 5.125 HK$2,200* 5 2
China Overseas Land & Investment
Ltd.
US$800 5 4.25 US$500 5 3.375
US$700 10 5.95 US$500 10 5.375
US$500 20 6.54
Country Garden Holdings Co. Ltd. US$550 5 7.875 US$750 10 7.5
US$250 5 7.5 US$750 8 7.25
China Resources Land Ltd. US$400 5 4.375 US$750 5 4.625
US$700 10 6
China South City Holdings Ltd. US$400 5 8.25 HK$975 5 6.5
RMB$1,000 5 7.5
Fantasia Holdings Group Co. Ltd. US$300 5 10.625 US$250 7 10.75
Franshion Properties (China) Ltd. US$500 5 5.75 USD$300 5 5.375
Gemdale Corp. RMB1,050 3 6.5 RMB2,000 5 5.625
Greenland Hong Kong Holdings Ltd. RMB1,500 4 5.5 US$700 3 4.75
Greentown China Holdings Ltd. US$500 Perpetual 9 US$300 6 8
Kaisa Group Holdings Ltd. US$250 4 8.875 RMB1,800 3 6.875
US$400 5 9
KWG Property Holding Ltd. US$600 5 8.975 US$300 7 8.625
Longfor Properties Co. Ltd. RMB2,000 4 6.75 US$500 10 6.75
Poly Real Estate Group Co. Ltd. US$500 5 5.25 US$500 5 4.5
R&F Properties (HK) Co. Ltd. US$1,000 5 8.5 US$400 7 8.75
Shimao Property Holdings Ltd. US$600 7 8.125 US$800 7 6.625
Dalian Wanda Commercial
Properties Co. Ltd.
US$600 10 7.25 US$600 5 4.875
China Vanke Co. Ltd. US$400 5 4.5 US$800 5 2.625
Yanlord Land Group Ltd. SG$400 3 6.2 RMB2000 3 5.375
Yuzhou Properties Co. Ltd. US$300 5 8.625 US$300 5 8.75
RMB--Chinese renminbi. HK$--Hong Kong dollar. *Convertible bond. Coupon rate before step-up. Source: Standard & Poor's.
We believe the offshore bond market will remain open to developers with a stronger credit profile despite potential
fund outflow and the U.S. Federal Reserve's upcoming easing of its bond buyback program. Recent examples
include China Overseas Land & Investment Ltd.'s (COLI) US$2 billion and Country Garden Holdings Co. Ltd.'s
US$800 million notes issuances. But companies with a limited track record won't find it easy to issue offshore
bonds, as shown by the cancellation of a deal by Jingrui Property. Other recent issuers include Longfor Properties
Co. Ltd., China Resources Land Ltd. (CR Land), and China Vanke Co. Ltd.
In general, the coupon rates on bonds issued by developers will be higher this year than their historical lows. But
rates will remain attractive compared with those on onshore borrowings, a mix of bank and trust loans. The
exceptions are a few 'B'-rated developers such as CIFI Holdings (Group) Co. Ltd. and China Aoyuan Property Group
Ltd., where the coupon rate improved meaningfully to reflect their longer track record.
We believe refinancing risk should be manageable for bonds due 2014. Over the past quarter, Powerlong Real
Estate Holdings Ltd. and China Properties Group repaid their bonds on maturity. We believe Country Garden
should be able to refinance or use its cash balance to pay off its outstanding bonds, given its healthy sales and
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balance sheets. We expect the parent company of Shanghai Industrial Urban Development Group Ltd. to step in as
a lender of the last resort if the company exhausts other refinancing channels. We believe the refinancing risk will
heighten for weaker players including Renhe Commercial Holdings Ltd. and Glorious Property Holdings Ltd. in
2015 as their U.S.-dollar bonds come due (see table 3). The companies may face liquidity or default risk unless their
sales improve.
Table 3
Companies With Bonds Maturing By The End Of 2015
Amount (mil.) Coupon rate Maturity Bond type
SOHO China Ltd.* HK$2,357 3.75% July 2014 Convertible
Shanghai Industrial Urban Development Group Ltd. US$400 9.75% July 2014 Senior unsecured
Country Garden Holdings Co. Ltd. US$375 11.75% September 2014 Senior unsecured
Powerlong Real Estate Holdings Ltd. HK$1,000 13.8% September 2014 Senior unsecured
Evergrande Real Estate Group Ltd. US$750 13% January 2015 Senior unsecured
Fantasia Holdings Group Co. Ltd. US$120 14% May 2015 Senior unsecured
Renhe Commercial Holdings Co. Ltd. US$300 11.75% May 2015 Senior unsecured
Gemdale Corp. RMB1,200 9.15% July 2015 Offshore renminbi bonds (CNH)
Country Garden Holdings Co. Ltd. US$400 10.50% August 2015 Senior unsecured
Powerlong Real Estate Holdings Ltd. US$200 13.75% September 2015 Senior unsecured
Road King Infrastructure Ltd. US$350 9.50% September 2015 Senior unsecured
Glorious Property Holdings Ltd. US$300 13% October 2015 Offshore renminbi bonds (CNH)
Central China Real Estate Ltd.* US$300 12.25% October 2015 Senior unsecured
Kaisa Group Holdings Ltd. RMB1,500 8% December 2015 Convertible
Yuzhou Properties Co. Ltd. US$200 13.50% December 2015 Senior unsecured
*Redeemed early. RMB--Chinese renminbi. HK$--Hong Kong dollar. Source: Standard & Poor's.
Aggressive Land Acquisitions
In our view, Chinese developers remain aggressive in pursuing debt-funded expansion. Despite good growth in
contracted sales, companies continue to spend a substantial proportion of the sales proceeds to acquire land. On
average, rated developers spent 38% of contracted sales proceeds to buy land from January to April this year (see
table 4). COLI, CR Land, Sunac China Holdings Ltd., Longfor, and Kaisa Group Holdings Ltd. have had a higher
appetite to replenish their land bank so far this year. Franshion Properties (China) Ltd. has been the most aggressive
in this regard. The company spent Chinese renminbi (RMB) 18.5 billion to buy land against sales of RMB3.4 billion
from January to April 2014. We expect Franshion to look for strategic or financial partners to fund a part of the
acquisitions.
Table 4
Land Acquisitions For Selected Rated Developers From January To April 2014
Contracted sales* Land acquisitions* Land acquisitions/contracted sales
(Bil. RMB)
China Vanke Co. Ltd. 67.0 9.7 14.41
Poly Real Estate Group Co. Ltd. 36.4 9.3 25.41
China Overseas Land & Investment Ltd. 36.3 19.4 53.52
Country Garden Holdings Co. Ltd. 41.1 9.7 23.51
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Table 4
Land Acquisitions For Selected Rated Developers From January To April 2014 (cont.)
Evergrande Real Estate Group Ltd. 44.4 11.0 24.75
China Resources Land Ltd. 13.7 10.9 79.54
Shimao Property Holdings Ltd. 18.0 4.3 23.89
Greentown China Holdings Ltd. 17.2 4.2 24.47
Sunac China Holdings Ltd. 14.3 11.9 83.48
Longfor Properties Co. Ltd. 12.6 8.5 67.13
Guangzhou R&F Properties Co. Ltd. 19.0 2.2 11.71
Agile Property Holdings Ltd. 13.2 1.3 9.85
Kaisa Groups Holdings Ltd. 6.2 7.4 118.60
KWG Property Holding Ltd. 6.9 4.6 66.17
CIFI Holdings (Group) Co. Ltd. 6.8 0.7 10.84
Franshion Properties (China) Ltd. 3.4 18.5 543.24
Central China Real Estate Ltd. 3.0 1.5 50.87
China Overseas Grand Ocean Group Ltd. 3.0 4.2 140.00
Yuzhou Properties Co. Ltd. 2.9 0.1 2.93
China SCE Property Holdings Ltd. 3.9 1.4 37.10
Fantasia Holdings Group Co. Ltd. 0.9 0.4 45.67
China Aoyuan Property Group Ltd. 2.6 0.6 23.85
Powerlong Real Estate Holdings Ltd. 2.0 0.8 40.20
Total 374.8 142.5 38.03
*Data for January to April 2014. RMB--Chinese renminbi. Source: Company announcements, China Real Estate Index System.
In our view, some of the more aggressive developers are vulnerable to a sudden decline in the property market due
to their large land payment commitments, and sometimes high per unit costs for land acquisitions. Examples
include Evergrande Real Estate Group Ltd. and Sunac China Holdings Ltd.
The high leverage of Chinese property developers could weaken their credit profile if sales performance deteriorates
substantially in 2014. The growth in debt outpaced that in cash for several rated developers in 2013 (see chart 7)
due to aggressive debt-funded expansion. This is despite strong sales bolstering developers' cash balances. Debt
grew more than 50% for several companies, including China Aoyuan, China Overseas Grand Oceans Group Ltd.
(COGO), China South City Holdings Ltd., CIFI, Dalian Wanda Commercial Properties Co. Ltd., Fantasia Holdings
Group Co. Ltd., and Guangzhou R&F Properties Co. Ltd. For Evergrande, total debt more than doubled during 2013.
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Chart 7
We believe many rated developers may turn more cautious in land acquisition and scale back new construction if
market conditions turn out to be much weaker than last year. Such caution may help them to rein in the rapid
increase in leverage. We expect most rated developers to adopt a flexible investment strategy this year.
The days of rapid price growth are behind us. We believe that margins will be further compressed for the sector as a
whole because construction and land costs have been rising. The government will continue to guide the market
toward a flat or at most moderate growth in selling prices over the next two to three years through building
subsidized housing and taxes. We would consider a developer's ability to maintain a 30% gross margin to be in line
with the market trend.
However, profit margins on a recognized basis could improve slightly in 2014 and part of 2015 as companies book
contracted sales in 2013, which had a good margin because of higher ASP and low-cost land purchased in the past.
Profit margin on contracted sales in 2014 will be under significant pressure because of lower ASP and the high costs
of land purchased after 2013.
Implementation Of Policy Measures Remains Key To Sales Performance
The Chinese real estate market remains highly reactive to the government's policy measures. No major policies
have been introduced in the past quarter. But the implementation of some restrictive measures has been less
stringent in selective markets.
We believe the central government is more market-oriented than the previous administration and will avoid
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launching new administrative measures. But healthy economic growth and social stability remain the key focus. It's
unlikely that the government will let the property sector collapse without lending a helping hand, given the sector's
importance to several upstream and downstream industries and many local governments.
Chart 8
Year-on-year growth in real estate investment has slowed and continues to trend down. This will affect other related
industries, such as steel and building materials, which are already burdened with excess capacity and high leverage.
A continued slowdown in the property sector will result in even gloomier prospects for these related sectors.
The Chinese economy faces several challenges. Trade and production index showed a mixed trend. Slowing GDP
growth and a crackdown on bribery and corruption will keep consumption and retail demand under pressure. The
Chinese government may have few options but to boost overall investment, including curtailing the slowdown in
real estate investments.
As long as owner-occupier demand remains healthy, control measures often create more problems than they
resolve. Pent-up demand builds up in a market that is sluggish for six to 12 months, and is released as soon as
temporary restrictions ease. The market then rebounds, continuing the cycle of volatility.
Some local governments have tested and relaxed home purchase restrictions. This could release some pent-up
investment demand. But in many lower-tier cities, investment demand is limited. So it remains to be seen whether
these relaxations can help the market to recover.
In addition, some local governments have set a limit on how much prices can go down to prevent markets from
collapsing. Although such steps show the government's determination to protect the property market against a deep
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downside, they could limit the pricing flexibility of some developers who heavily rely on deep price cuts to survive.
This, in turn, could make some small developers more vulnerable this year.
The most effective way to support market sentiment will be some loosening of liquidity. The central bank
commented earlier this month that commercial banks should continue to support mortgages of owner-occupiers
when they buy their first property. However, whether or not banks will follow the direction remains to be seen.
We believe the government's adoption of market-oriented policies will bear fruit in the long term. Increased land
supply and development of public housing would reduce demand pressure due to increasing urbanization.
Redevelopment of old town centers will remain a government priority. We believe developers with experience for
these types of projects and good connection to local governments will likely benefit. Poly Real Estate Group Co.
Ltd., Kaisa, and a few others have good experience in this regard.
Appendix
Table 5
Rating List
Issuer Name Issuer Credit Rating (as of June 5, 2014) CreditWatch/Outlook
Agile Property Holdings Ltd. BB Stable
Central China Real Estate Ltd. BB- Stable
China Aoyuan Property Group Ltd. B Stable
China Overseas Grand Oceans Group Ltd. BBB- Stable
China Overseas Land & Investment Ltd. BBB+ Stable
China Properties Group Ltd. B- Stable
China Resources Land Ltd. BBB Positive
China SCE Property Holdings Ltd. B Stable
China South City Holdings Ltd. B+ Positive
China Vanke Co. Ltd. BBB+ Stable
CIFI Holdings (Group) Co. Ltd. B+ Stable
Coastal Greenland Ltd. B- Negative
Country Garden Holdings Co. Ltd. BB Positive
Dalian Wanda Commercial Properties Co. Ltd. BBB+ Stable
Evergrande Real Estate Group Ltd. BB- Negative
Famous Commercial Ltd. BB Stable
Fantasia Holdings Group Co. Ltd. BB- Negative
Franshion Properties (China) Ltd. BBB- Stable
Future Land Development Holdings Ltd. BB- Stable
Gemdale Corporation BB+ Stable
Glorious Property Holdings Ltd. B- Negative
Golden Wheel Tiandi Holdings Co. Ltd. B Stable
Greenland Holding Group Co. Ltd. BBB Stable
Greenland Hong Kong Holdings Ltd. BBB- Stable
Greentown China Holdings Ltd. BB- Stable
Guangzhou R&F Properties Co. Ltd. BB Stable
Hengli (Hong Kong) Real Estate Ltd. BBB Stable
Hopson Development Holdings Ltd. B- Stable
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Table 5
Rating List (cont.)
Kaisa Group Holdings Ltd. BB- Stable
KWG Property Holding Ltd. BB- Negative
Longfor Properties Co. Ltd. BB+ Stable
Mingfa Group (International) Co. Ltd. B Stable
Poly Real Estate Group Co. Ltd. BBB+ Stable
Powerlong Real Estate Holdings Ltd. B Stable
R&F Properties (HK) Co. Ltd. BB Stable
Renhe Commercial Holdings Co. Ltd. CCC Negative
Road King Infrastructure Ltd. BB- Stable
Shanghai Industrial Urban Development Group Ltd. BB Stable
Shimao Property Holdings Ltd. BB Stable
SOHO China Ltd. BB+ Stable
Sunac China Holdings Ltd. BB- Stable
Times Property Holdings Ltd. B+ Stable
Vanke Real Estate (Hong Kong) Co. Ltd. BBB+ Stable
Wanda Commercial Properties (Hong Kong) Co. Ltd. BBB Stable
Xinyuan Real Estate Co. Ltd. B+ Stable
Yanlord Land Group Ltd. BB- Stable
Yuexiu Real Estate Investment Trust BBB Stable
Yuzhou Properties Co. Ltd. B+ Stable
Zhong An Real Estate Ltd. B Negative
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Chart 9
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Chart 10
Table 6
Bond Issues For Companies Rated By Standard & Poor's (Year-To-Date)
Issuer Currency
Sale/Original amount
(mil.) Coupon (%)
Final maturity
date
Issue
rating
R&F Properties (HK) Co. Ltd. (Guangzhou
R&F)
US$ 1,000 8.5 1/10/2019 BB-
KWG Property Holding Ltd. US$ 600 8.975 1/14/2019 B+
China Aoyuan Property Group Ltd. US$ 300 11.25 1/17/2019 B-
Shimao Property Holdings Ltd. US$ 600 8.125 1/22/2021 BB-
China Overseas Grand Oceans Group Ltd. US$ 400 5.125 1/23/2019 BBB-
Fantasia Holdings Group Co. Ltd. US$ 300 10.625 1/23/2019 B+
Yuzhou Properties Co. Ltd. US$ 300 8.625 1/24/2019 B
CIFI Holdings (Group) Co. Ltd. US$ 200 8.875 1/27/2019 B
China South City Holdings Ltd. US$ 400 8.25 1/29/2019 B
Wanda Commercial Properties (Hong Kong)
Co. Ltd. (Dalian Wanda)
US$ 600 7.25 1/29/2024 BBB-
Agile Property Holdings Ltd. US$ 500 8.375 2/18/2019 BB-
Agile Property Holdings Ltd. RMB 2,000 6.5 2/28/2017 BB-
Famous Commercial Ltd. (Gemdale) RMB 1,050 6.5 3/4/2017 BB-
Times Property Holdings Ltd. US$ 305 12.625 3/21/2019 B
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Table 6
Bond Issues For Companies Rated By Standard & Poor's (Year-To-Date) (cont.)
Franshion Brilliant Ltd. (Franshion) US$ 500 5.75 3/19/2019 BBB-
Hengli (Hong Kong) Real Estate Ltd. (Poly) US$ 500 5.25 4/25/2019 BBB-
Yanlord Land Group Ltd. S$ 400 6.2 5/8/2017 BB-
Country Garden Holdings Co. Ltd. US$ 550 7.875 5/27/2019 BB
China Overseas Finance (Cayman) VI Ltd.
(COLI)
US$ 800 4.25 5/8/2019 BBB+
(COLI)
US$ 700 5.95 5/8/2024 BBB+
Central China Real Estate Ltd. S$ 200 6.5 5/26/2017 BB-
Country Garden Holdings Co. Ltd. US$ 250 7.5 5/27/2019 BB
Longfor Properties Co. Ltd. RMB 2,000 6.75 5/28/2018 BB
Kaisa Group Holdings Ltd. US$ 400 9 6/6/2019 BB-
(COLI)
US$ 500 6.45 6/11/2034 BBB+
Note: Company names in parenthesis refer to the parent of the issuing entity. RMB--Chinese renminbi. SG$--Singapore dollar.
Table 7
Rating Actions Over The Past Quarter
Ratings
Issuer To From Rating action Rating action date
Times Property Holdings Ltd. B+/Stable/-- Not rated New rating March 10, 2014
Fantasia Holdings Group Co. Ltd. BB-/Negative/-- BB-/Stable/-- Outlook revision April 23, 2014
Evergrande Real Estate Group Ltd. BB-/Negative/-- BB/Watch Neg/-- Downgrade April 29, 2014
China Resources Land Ltd. BBB/Positive/-- BBB/Stable/-- Outlook revision May 2, 2014
Kaisa Group Holdings Ltd. BB-/Stable/-- B+/Stable/-- Upgrade May 2, 2014
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