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China property
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Jinke Property seeks payment extension on 1.24 billion yuan of onshore bond to avert default

  • Company is seeking creditors agreement to extend payment for most the outstanding 1.24 billion yuan (US$188 million) onshore bond
  • Stocks and bonds of Jinke and subsidiary fell, as company joined Sunac China Holdings as the latest home builders embroiled in debt crisis

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Undated photograph of the signage of Jinke Property Group. Photo: Handout
Iris Ouyang

Jinke Property Group is seeking to extend the payment deadline of its 1.25 billion yuan (US$188 million) onshore bond to avert a default, as the Chinese government’s policy easing on the real estate sector was too late to have any material impact on its overall business.

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The developer asked creditors to extend the payment date on its 1.25 billion yuan principal and the 5 per cent coupon after investors exercised their put option, which requires Jinke to pay by May 28. The vast majority of the bondholders, with 1.24 billion yuan of the face value of the 1.25 billion yuan issue, exercised the put option.

“Given the balance sheet situation, cash collections from sales and liabilities, we hope to extend this bond for one year to have the time to recover our cash flow,” said Song Ke, Jinke’s vice-president and financial manager during an investors’ call.

Jinke’s debt crisis highlighted the ongoing struggles of home builders in the world’s largest property market despite recent policy easing, as sluggish sales and Covid-19 lockdowns are clouding the industry’s outlook. Sunac China Holdings, one of the largest developers in China, missed paying the coupon on two dollar bonds.
Unfinished residential buildings are pictured at the Evergrande Oasis, a housing complex developed by Evergrande Group, in the Henan provincial city of Luoyang on September 15, 2021. Photo: Reuters.
Unfinished residential buildings are pictured at the Evergrande Oasis, a housing complex developed by Evergrande Group, in the Henan provincial city of Luoyang on September 15, 2021. Photo: Reuters.

China’s prices of new homes fell for the first time in seven years in April, while the prices of lived-in homes declined for the eighth consecutive month. Authorities have ramped up measures to revive the market, as the central bank on Friday slashed the five-year loan prime rate (LPR) – reference for home mortgages – by a bigger-than-expected 15 basis points.

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