Default of Fantasia Adds to the Evergrande Contagion
Fantasia rating cut to default while investors fearing who's next in the highly levered property sector
First highly leveraged Chinese real estate developer Fantasia Holding Group Co. (1777 HK) saw cut in rating to default failing to pay $205.7 million bond payment that was due on Monday.
Fantasia’s default has set pessimistic sentiment on the Chinese property sector and left investors wonder the degree of liquidity to meet debt load other property firms has given the players in this sector are highly levered.
Hang Seng property stocks posted losses today by 0.39% while China bourse saved itself narrowly from the heat as the country is on holiday.
China Evergrande’s property services wing remains suspended on the Hang Seng index as it is yet to disclose details of earlier mentioned “major transaction”.
Earlier S&P Global said likely default of Evergrande will not bring any substantial impact on the provincial and national economy of China.
