Fantasia Holdings Group Company
Another large China-based homebuilder Fantasia Holdings Group Company has been downgraded by Fitch. Fitch downgraded Fantasia from CCC- from B. This downgraded rating is a result of missed credit payment of $206 million USD. Last week China’s second-largest Evergrande property developer was in the media for having missed two credit payments and is reportedly $310 billion in debt.
Missed Payment of $100 Million USD
Today, financial media outlets are reporting that Fantasia missed a payment due on September 28, 2021, to bondholders. The bond had been guaranteed by the company but it doesn’t appear to have been disclosed in the company’s financial reports.
Transferred Funds Can’t be Located
According to Fantasia Holdings Group, it transferred the funds to the relevant accounts on September 28, 2021, and bondholders received the funds the day after. The company also said that it has prepared funds for the remaining $50 million USD for the bond that is due in early October. Yet, Fitch can’t confirm these payments were made and so it has logged them as late payments. This discrepancy leads financial analysts to think that Fantasia’s liquidity is tighter than has been reported.
The Fantasia late payment also raises doubt about the company’s ability to repay its debts and maturities on a timely basis. The missed payment casts doubt on the transparency of the company’s financial filings. Given that China is experiencing energy shortages and a general economic slowdown it will be interesting to see if China is able to restructure its property development sector so that it is able to build the housing that it needs.
Elaine Allan, BA, MBA
Technology and Business Blogger
Vancouver, BC, Canada