China Economy

China's property developers are seen having a hard time accessing U.S. bond markets

Key Points
  • China's property troubles will make it harder for developers in the country to access U.S. debt markets, according to Moody's Investors Service.
  • "We are seeing the trend of China property turmoil continuing to dampen enthusiasm for some high-yield issuance," Annalisa Di Chiara, a senior vice president at Moody's, told CNBC "Squawk Box Asia."
  • Given those funding conditions, "it's going to continue to remain a challenge for some of those issuers to access the U.S. dollar bond market," she said.
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China's property troubles will make it harder for developers in the country to gain access to U.S. debt markets, according to Moody's Investors Service.

"We are seeing the trend of China property turmoil continuing to dampen enthusiasm for some high-yield issuance," Annalisa Di Chiara, a senior vice president at Moody's, told CNBC "Squawk Box Asia" on Monday.

China's property developers have about $35 billion worth of U.S. dollar-denominated debt that will come due this year, she added.

"If we were to carve out the refinancing needs for those issuers that have already defaulted, that probably carves out about $15 billion out of that $35 billion," said Di Chiara. That leaves around $20 billion in refinancing need for China's property developers.

Given the tight funding conditions, "it's going to continue to remain a challenge for some of those issuers to access the U.S. dollar bond market," she added.

Problems in China's property sector were in part worsened by the debt crisis at Evergrande — once China's second-largest property developer by sales. It racked up debts of more than $300 billion and is struggling to repay creditors. 

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As debt worries within China's real estate sector have mounted, developers like Evergrande have tried to sell off their assets in recent months to ease the cash crunch.

Evergrande shares took a hit in recent days after its restructuring roadmap disappointed investors.

"We need to have some of these companies be able to access the U.S. dollar bond market, restore some of their liquidity and again see some stabilization in that property sector," Di Chiara said.

"I do think that as we go through this restructuring of Evergrande, some of the transparency will start to provide a little bit of a confidence for the investor base," she said.