Chinese Homebuilders Face Exposure to Evergrande

Chinese homebuilder and construction company Jiangsu Zhongnan Construction has been in the news due to exposure to Evergrande receivables. Liquidity of the home builder has been under pressure given that Evergrande is its single-largest customer.

Our Asia Core Credit reporters got hold of a statement Zhongnan made to investors, disagreeing with S&P’s decision to lower its credit ratings to B- citing perceived weakening liquidity. In its statement, Zhongnan said it has further reduced its leverage ratios, and that its cash against short-term borrowings was up over the June 30 level. In a second story about Zhongnan last week, we reported that the company told investors that it had prepared sufficient funds and will redeem its RMB 1B bond putable on Nov. 22. It also has been trying to persuade holders to withdraw their put, which was confirmed by the company in a filing. To access the linked articles, request trial access here.