(Yicai Global) June 28 -- China’s private real estate developers are resorting to desperate means such as expensive loans and asset sales ahead of an impending high season for debt repayment.

China’s 200 major developers have CNY175.5 billion (USD26.2 billion) of bonds due this month and next, with 67 percent of that issued by private builders, according to the latest data from the CRIC Research Center. In addition, overseas bonds account for 56 percent of the CNY117.6 billion owed by private firms in the second half of this year.

Builders are scrambling to deal with their debt, extending repayment periods, accepting extremely high interest rates, and as a last resort even selling off assets amid sluggish sales and a government crackdown on excessive borrowing by developers.

The situation is particularly tough for smaller firms as rebounding sales are not enough to cover bills and it is not easy to borrow. Most of the developers that issued bonds from January to April were state owned, according to statistics from the China Index Academy. Private firms sold just eight bonds.

Some private builders have defaulted, which affects the banking sector’s assessment of these types of companies, a senior manager at one developer said at an investor meeting organized by the Shanghai Stock Exchange last month. As a result, two large lenders, former partners of the builder, no longer buy the bonds of private real estate firms. The company sold two bonds between February and May, but felt the market pinch during the second issuance, he added.

The financing environment for private developers has not greatly improved yet, as mortgages are basically the only approach left for them to raise funds, a fixed-income analyst told Yicai Global.

Some are ready to trade almost anything for cash. Guangzhou-based Agile Group Holdings recently inked a deal to borrow as much as HKD894 million (USD113.9 million) over 24 months with an annual interest rate of 20 percent, using a plot of land on King's Road, Hong Kong, as collateral.

“Private real estate companies must get money if they want to survive amid the current difficulties,” Dennis Huang, chief executive of Wilson Capital International, told Yicai Global. “It’s not important whether the interest rates are high or not.” According to the fixed-income analyst, other private builders are also pursuing similar financing to Agile.

Editors: Tang Shihua, Emmi Laine, Xiao Yi