[ET Net News Agency, 1 June 2020] Moody's Investors Service said in a new report that
the decline in Chinese property sales is slowing, with monthly nationwide sales
contracting only 2.6% in April compared to last year - an improvement from the 12.1%
contraction recorded in March.
"As the impact of coronavirus dissipates in China, the property sector is starting to
show more activity with nationwide contracted sales recovering gradually and offshore bond
issuance picking up," said Danny Chan, a Moody's Assistant Vice President and Analyst.
"And as we expected, rated developers continue to outperform the broader market, as
evident by our 30 rated developers' property sales value (on a three-month average)
declining by only 11.7% in April, lower than the 12.9% decline in the broader market,"
added Chan.
Rated developers' offshore bond issuance picked up in May (to 25 May), with three
developers issuing bonds totaling US$944 million, from a low level of US$87 million in
April. Moody's expects offshore bond issuance for the rest of 2020 to remain modest and
selective for issuers with good credit quality.
In addition, Moody's Asian Liquidity Stress sub-indicator for rated high-yield Chinese
developers remained at 21.7% in April. The indicator measures the percentage of high-yield
companies with weak liquidity as a proportion of high-yield corporate family ratings.
Although rated developers' refinancing needs remain high over the next 12 months,
Moody's expects most rated high-yield developers will be able to address their bonds
maturing through May 2021, including puts. (KL)