Equity-linked bankers foresee that CIFI Holdings default might completely shut the door for private Chinese developers entering the CB market. Meanwhile, a credit analyst argued that the delay explanation is more like an excuse. It might reflect the current situation in the company not having enough money to cover payments. Analysts in Nomura also noted that they view an exchange of CIFI’s US dollar bonds as inevitable. The bankers argued that CIFI is one of the private developers selling a government-supported bond.
Then, he added that the investors might think at least this means that they own banking from the Chinese government. Furthermore, he noted that the CB default is like the moment of truth. It tells the global investors private developers are something not to see. Then, on September 21, the onshore subsidiary of CIFI Group issued Rmb 1.2bn of three-year 3.22% bonds full guarantee. This is from the state-owned China Bond Insurance. The Chinese authorities have relatively selected strong property companies. They are Longfor Group Holding and Midea Real Estate to issue the guaranteed bonds to restore the investors’ confidence.
In a media report, CIFI argued that media reports and market rumors about its offshore debt are not true. However, they do not give further details or say about which part of inaccuracy they mean. So far, CIFI warned the creditors and investors not to listen to the media and reports rumors. An analyst from Lucror said in a note that this is a degree of tone deafness. He added that the company is not clear with information, leaving a void that stakeholders would have filed with whatever circulating in the market.
