Few Chinese Developers Qualify for New Bond Guarantee Program, Industry Sources Say

China’s pilot program to guarantee the bonds of real estate developers via a state-owned enterprise (SOE) could help curb risk contagion, but it is unlikely to prop up the whole sector as firms that have already missed debt payments may not qualify, industry sources said.

The critiques cast doubt on one of the latest attempts by regulators to make it easier for struggling developers to sell bonds on a market where investors are reluctant to fund them, given the industry’s record of debt defaults and stalled residential projects that have incurred fury among homebuyers.