In 2024, Chinese real estate developers faced a total bond maturity of 482.8 billion yuan, with a significant gap in repaying the maturing debt through refinancing. As a result, the pressure to repay debts will be partially shifted to 2025, with an estimated debt maturing volume of 525.7 billion yuan within the year. Many struggling real estate companies have resorted to debt restructuring as a means to survive and continue their operations.
According to a report from “Yicai” on January 13, the total bond maturity of Chinese real estate developers in 2024 reached 482.8 billion yuan, while the issuance volume was only 215.8 billion yuan, indicating a substantial shortfall in repaying maturing debts through new borrowing.
In terms of non-bank financing, corporate bonds remain the main financing channel for Chinese real estate developers.
Statistics from China Index Research Institute show that in 2024, the real estate industry raised a total of 565.31 billion yuan through bonds, marking an 18.4% decrease compared to the previous year. Looking at data from typical real estate companies, research by CRIC indicates that the total financing amount for 65 typical real estate companies in 2024 was 462.9 billion yuan, showing a 31% decline year-on-year.
CRIC warns that due to the trend of debt extensions and replacements in recent years, the debt pressure on real estate developers in 2025 remains significant. The debt maturing volume in 2025 is estimated at 525.7 billion yuan, with the third quarter posing as a peak period for debt repayments, amounting to approximately 157.4 billion yuan.
Near the Chinese New Year, several Chinese real estate companies have made progress in debt restructuring. Country Garden and Longfor Group have disclosed plans for reorganizing overseas debts, while Sunac China is undergoing a second round of debt restructuring, both domestically and internationally.
On January 9, Country Garden revealed the initial proposal for its overseas debt reorganization, offering debt holders five options to convert debts into cash, compulsory convertible bonds, different notes, or loan financing.
Country Garden’s outstanding overseas debts amount to around 16.4 billion US dollars, with the goal of reducing debts by up to 11.6 billion US dollars, extending maturity by a maximum of 11.5 years, and lowering financing costs to 2%.
However, a special group of bondholders has expressed dissent towards the proposal, citing disagreements on key issues such as conversion prices. This group holds over 30% of Country Garden’s “Unpaid Offshore Senior Notes and Convertible Bonds” totaling 10.3 billion US dollars.
In addition to debt restructuring, several real estate companies are facing liquidation petitions, which have become a common negotiation strategy for creditors.
Recently, Sing Tao Holdings applied for liquidation against Sunac due to a 30 million US dollar loan, while Shimao Group encountered a liquidation petition from creditors for 258 million yuan. On the evening of January 13, China Evergrande announced that CEG Holdings was ordered to be liquidated by the Hong Kong court, and the company holds nearly half of Evergrande Properties’ shares.