Moody’s Says Developer Default Risk to Slow Sales: China Credit

Moody’s Investors Service said the risk more Chinese property developers will default, after the collapse of Zhejiang Xingrun Real Estate Co., will make it harder for them to raise funds just as apartment sales cool.

The builders have issued $500 million of offshore yuan or dollar bonds this month, compared with $1.6 billion in the same period last year and a record $9.2 billion in the first quarter, data compiled by Moody’s show. Notes in Bank of America Merrill Lynch’s emerging markets index of Chinese corporates including property companies returned 0.8 percent in the past year. That compares with a 1.5 percent total gain for bonds globally, according to Bank of America.