(Bloomberg) -- Times China Holdings Ltd. and Redsun Properties Group Ltd. both saw their credit ratings downgraded by Moody’s Investors Service Thursday, a development that underscores the continued liquidity squeeze plaguing China’s weakest developers. 

Elsewhere, Sunac China Holdings Ltd.’s key onshore unit said it plans to allow holders of a 4 billion yuan ($629 million) bond more time to cancel their requests for early redemptions if they have missed a prior deadline.

A Bloomberg stock gauge of the country’s developers fell 3.5% Thursday, paring its advance since mid-March to 40%. Chinese offshore junk bonds, dominated by builders, also dropped Thursday but remained on pace to rise for a third week after advancing the most in 2022 a week earlier, a Bloomberg index shows.

Key Developments:

  • Developer Dexin China Repurchased $2.74m of 2022 Notes
  • China Developer Rally Runs Up Against Impatience for Policy Plan
  • Sunac Extends Redemption Deadline for 4.78% Yuan Bond
  • Times China Downgraded to B2 by Moody’s
  • Logan Drops as Deutsche Downgrades on Potential Hidden Debt
  • Central China Moves to Withdraw Moody’s Ratings After Downgrade
  • Sunac Misses Trust Product Payments: Securities Times
  • Zhenro Unit Proposes to Extend Most of 627m Yuan ABS by a Year

Developer Dexin China Repurchased $2.74m of 2022 Notes (7:52 a.m. HK)

Dexin China Holdings Co. recently bought back an aggregate principal amount of $2.74 million of its 2022 notes in the open market, according to a statement to the Hong Kong stock exchange late Thursday.

The company has so far repurchased $16 million of the bond, representing about 8% of its total. 

China Developer Rally Runs Up Against Impatience for Policy Plan (7:51 a.m. HK)

The Chinese government’s pledge of support for embattled developers ignited a frenzied rush for stocks and bonds.

But three weeks later, the frantic rally is testing the limits of investors’ patience as Beijing has yet to spell out details of how the government would relax curbs to prevent a disorderly collapse in the property market.

The market is pulling back from a spell of exuberance for an industry that’s been crippled by crackdowns and mountains of debt that crushed large developers including China Evergrande Group and Shimao Group Holdings Ltd. It’s a sobering reality check as China braces for the fallout from its worst coronavirus outbreak, which has locked down major economic hubs from Shenzhen to Shanghai.

Sunac Extends Redemption Deadline for 4.78% Yuan Bond (7:45 a.m. HK)

Sunac Real Estate Group said it plans to allow holders of its 4 billion yuan bond to still cancel their early redemption requests even if they have missed the prior deadline, according to a filing to the Shanghai Stock Exchange.

The company has earlier allowed bondholders to cancel the requests between March 11 and 28. Bondholders who have missed the March 28 deadline can now make the cancellation requests from April 11 to April 22.

Times China Downgraded to B2 by Moody’s (7:37 a.m. HK)

Times China’s long-term corporate family rating was downgraded by Moody’s to B2 from B1. Its senior unsecured debt rating was cut to B3 from B2. Moody’s said the decision reflects its expectation that the developer’s liquidity will weaken because of its declining operating cash flow. 

Meantime, the risk assessor also lowered Redsun Properties’ corporate family rating to B3 from B2 and the company’s senior unsecured rating to Caa1 from B3. 

“The downgrade reflects Redsun’s heightened refinancing risks and weakened liquidity driven by its weak operating cash flow and sizable debt maturities over the next 12-18 months,” Moody’s analyst Cedric Lai said in a statement. 

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