A piece in the Wall Street Journal says that while China Evergrande is the first high-profile real-estate company to run into serious trouble it may not be the last.
Citing Nomura's estimate of debt developers have taken on, at USD $5 tln. The article goes on:
- Global markets are braced for a possible wave of defaults, with warning signs flashing over the debt of about two-fifths of development companies that have borrowed from international bond investors.
- Chinese leaders are getting serious about addressing the debt, with a series of moves meant to curb excessive borrowing.
- Some prospective home buyers are balking, forcing the companies to cut prices to raise cash, and potentially accelerating their slide if the trend continues.
As I write this, news is crossing re Luxury developer Fantasia Holdings Group Co. - says parent company has formed an emergency group to solve liquidity problems.
