For much of 2026, China’s grinding property crisis had been described as “boring” by restructuring lawyers and distressed investors. Most of the action had been had, and all that was left was to negotiate around the edges.
This week, that changed. On Monday, the market awoke to reports that Zhuhai Huafa Properties did not know how it would acquire the funds needed to make debt payments due in the coming months.
By late afternoon Hong Kong time, a CNY 1.4bn ($209.6m) 4.5% bond due December 2027, issued by the developer’s parent, Zhuhai Huafa Group, had fallen by 10 points. It was a short, sharp shock for investors — and would prove to be the opening shot in one of the worst weeks in more than a year for China’s junk dollar bonds.
It wouldn’t just be Zhuhai Huafa either. By Thursday’s close Yuexiu Property, a Guangzhou state-owned developer, would see its 2031 bond sink to near 85 cents per dollar, while Beijing Capital Development’s 2029 bond would fall almost to 91 cents.
Maturities
As of H1 26, Zhuhai Huafa had debtsof CNY 404.7bn. Of that, about 41%, or more than CNY 167bn, was due by...
