(Yicai Global) Aug. 21 -- Sunac China Holdings, a Chinese real estate developer with an over 90 percent debt ratio, has secured financing contracts worth USD280 million with eight banks, including HSBC, Sunac said in a statement yesterday.

China Construction Bank is acting as the financing agent, and the banks are extending aggregate loan financing of USD280 million to Sunac on condition that the total amount will rise to no more than USD400 million if any other financial institutions join in the funding, per the statement.

The credit term is 36 months from the date of the financing agreement and Sunac will use the funds to service existing debt.

The company's shares [HKG:1918] gained a modest 0.43 of a percent up to HKD34.65 (USD4.41) at today's opening on the news.

Chinese realty developers have long leveraged their aggressive expansion, confident that China's urbanization drive would perpetually buoy the market. Recent government curbs on property price rises and slowing economic growth mean many are now being called on to pay the piper and such debt restructuring may thus soon become the new normal in the Chinese commercial real estate milieu.

Tianjin-based Sunac's net gearing ratio has risen steeply for each year since 2014, topping 200 percent in 2017, while its overall debt hit CNY644 billion (USD91 billion) at a ratio of 89.8 percent last year. Its total liabilities exceeded CNY700 billion with a debt ratio over 90 percent as of June.

The company secured sale contracts totaling CNY214.2 billion in the first half, up 12 percent per year. Its cumulative land purchases exceeded CNY80 billion in the first half to rank it in the top three among its domestic peers.

Editor: Ben Armour