Wary of billion-dollar defaults, China does not want its daredevil real estate developers to take on any more debt.
Banks have been asked to limit their housing loan exposure, while developers that cross the so-called three red lines — a trio of leverage metrics Beijing watches — are forbidden from borrowing more.
Investors are clearly worried. China Fortune Land Development Co., a mid-sized developer, saw its dollar bonds tumble to record lows recently. How can home builders get out of their distress?