Chinese property developer Kaisa's default on a HK$400 million $51 million loan with HSBC has given lenders further reason to fret about their exposure to China's fragile property sector.
With home sales slowing and liquidity conditions tight for developers, the Chinese government threw the property sector a helping hand in November by cutting interest rates.
But Kaisa's default shows Chinese developers are by no means out of the woods.
“It’s a worry to lenders. It shows what’s happening to the real estate sector in China, one Hong Kong-based senior loan banker at a foreign bank told Finance Asia. I think we are going to see this happen to a...