By Clarence Leong


Greenland Holding Group Co. has been downgraded to "selective default" by S&P Global Ratings after it extended the maturity of an offshore bond, making it the latest Chinese property developer to be considered in default amid a prolonged sector downturn.

The move comes after the developer completed a one-year maturity extension for a $500 million bond due June 25, S&P said Wednesday.

The situation at Greenland, which counts the Shanghai government as a major shareholder, illustrates that even state-backed company's aren't being spared from the turmoil in China's property market.

S&P said it views the debt extension "as a distressed debt restructuring tantamount to a default," and that, failing to extend the bond, Greenland would have likely "lacked the resources and funding options to fully repay them upon maturity."

"The company still faces a significant amount of offshore debt maturities over the next 12 months, totaling about $2.4 billion," the ratings firm added.

Its Hong Kong-listed unit, Greenland Hong Kong Holdings Ltd., earlier this month posted 5.82 billion yuan ($870.0 million) in contracted sales for the first five months, down 58% from a year earlier.

Sales in China's property sector have remained sluggish despite easing government policy on mortgages, dragged by weak home-buyer sentiment and pandemic restrictions. There are signs that sales have been improving this month, but analysts have cautioned that the recovery has yet to prove sustainable.

Greenland Hong Kong shares were last up 1.3% at HK$1.60, but still down 36% over the past 12 months.


Write to Clarence Leong at clarence.leong@wsj.com


(END) Dow Jones Newswires

06-22-22 0111ET