China builders hit by downgrades as Evergrande deadline looms

Chinese developers took a drubbing on Thursday, with shares and bonds falling, creditors seizing assets and rating agencies distributing more downgrades, ahead of a final debt payment deadline for China Evergrande Group on Friday.

Shares of Kaisa Group were hardest-hit, losing nearly a fifth of their value on Thursday after rating agency downgrades that highlighted the company's limited access to funding and significant US dollar debt obligations.

Kaisa's shares fell by as much as 19.9 per cent to an all-time low of HK$1.17 on Thursday, while its 11.25 per cent April 2022 bond dropped more than 8 points to trade at less than 35 per cent of its face value, according to data provider Duration Finance. Kaisa led losses across the real estate sector. A Hong Kong index tracking mainland property companies fell 1.3 per cent and the Real Estate sub-index lost 2.3 per cent.

Shares of China Evergrande Group, whose liquidity crunch against more than $300 billion in liabilities has sparked global concern it could trigger systemic risks, fell more than 5 per cent. Evergrande faces a final deadline on Friday for a $47.5 million coupon payment that was due September 29.