JPMorgan on the hidden debt in China's property bubble
A report from JPMorgan is doing the rounds and it outlines used off balance sheet debt in a window-dressing effort to bring down leverage ratios.
They note that Evergrande reported 100% leverage ratios but when you add in commercial paper, wealth management products and perpetual securities the net gearing is 177% and "and could be even higher".
They also highlight other property firms that could have leverage significantly higher as:
- R&F Properties
- Sunac China Holdings
- Country Garden
China returns from holiday today and that means that Evergrande will be back on the menu.
