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China's No. 3 Developer Makes Deals as Default Risks Escalate

  • Bloomberg model shows Greenland default probability at 6.89%
  • Yield spread on Greenland debt widens 47 basis points in 2016
A worker labors in front of condominium buildings developed by Greenland Holding Group Co. under construction at the Jeju Healthcare Town in Seogwipo, Jeju, South Korea, on Monday, March 17, 2014.
Photographer: SeongJoon Cho/Bloomberg
Updated on

China’s third-largest developer is sustaining its pace of deal making even as bond investors start to price in a higher risk of default.

The yield spread on Greenland Holdings Corp.’s $600 million 5.875 percent 2024 notes over U.S. Treasuries has widened 47 basis points this year to 404. There is a 6.89 percent probability it will miss debt payments in the next 12 months, according to the Bloomberg Default Risk model that tracks metrics including share performance, debt and cash flow. While the risk of default has declined from a late-January peak of 8 percent, it’s the highest among the nation’s biggest developers.