Developers' bonds wilt as issuers' finances weaken

Hui Ka Yan's property company is among the Chinese builders whose bonds are slumping as investors highlight weakening finances, limited creditor protection and record debt maturities.

Evergrande Real Estate Group Ltd, a developer that has expanded into soccer team ownership and baby formula, is "looking into" refinancing $1.35 billion of notes due January, the company said last Wednesday. The yield on its 2018 notes surged 256 basis points this year to 11.2 percent as the industry faces an unprecedented $12.7 billion in bond repayments next year, data compiled by Bloomberg show.

The Guangzhou-based company changed rules to allow a lower income to expense ratio, among four Chinese builders to alter covenants in the past 12 months.