Chinese credit differentiation

Stronger Chinese developers gaining over weaker ones

Bigger Chinese real estate firms are gaining market share and more discriminatory credit markets are partly the reason why.
Shenzhen, where many Chinese developers have property projects
Shenzhen, where many Chinese developers have property projects

Current credit conditions are separating the wheat from the chaff in the Chinese property sector, with larger, better-rated developers enjoying increasingly favourable borrowing conditions and winning business at the expense of smaller ones.

Despite the potential for a slight overall drop in funding costs this year, there is still a highly discriminatory market vibe, according to Moody’s. 

“The difference between highly rated developers and low-rated developers is becoming apparent,” Franco Leung, the rating agency's associate managing director, said at a press briefing in Hong Kong on Wednesday. “Developers with good credit quality and scale will benefit from the current credit conditions while the lowly-rated developers...

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