FINANCIAL SERVICES | Staff Reporter, Hong Kong

Property developer to default on dollar bonds amidst rising borrowing costs

Hsin Chong Group’s inability to pay its debt mimics Noble Group's insolvency situation.

Bloomberg reports that property developer Hsin Chong Group Holdings Ltd. is set to default on $300m in 2018 securities as ballooning borrowing costs are continuing to squeeze firms’ ability to repay debt. 

Also read: Is the end near for Hong Kong's red hot property market?

The developer has already engaged with noteholders and advisers to find a consensual solution, a move which runs parallels with embattled commodity trader Noble Group, who was the first Asian company to default on its dollar bonds this year. This comes as the borrowing costs for Asia’s junk-rated issuers climbed about 1.5 percentage points since October to a near a two-year high of 7.58%.

Also read: Hong Kong banks lift time deposits amidst expected rate hikes

“The whole refinancing environment is tough for weak borrowers in general, whether they are from China or Hong Kong,” said Christopher Lee, managing director of corporate ratings at S&P in Hong Kong.

Here’s more from Bloomberg:

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