China Weighs Moderate Ownership Constraints To Help Troubled Developers Offload Assets

Chinese regulators, wary of spreading financial risks as a result of their crackdown on mortgage lending, are considering easing rules to allow troubled developers to sell assets to avoid defaults and hit the broader economy.

Currently, the rules put in place late last year to limit how much real estate companies can borrow, called the “three red lines” on leverage ratios, are so stringent that they have hurt developers like China Evergrande Group’s ability to borrow. Selling assets to pay off debts.

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