China’s property builders have a mountain of worldwide debt to refinance this yr, and tight lending situations are elevating the danger of defaults.

The true-estate corporations have to repay as much as $53.5 billion of offshore debt this yr, a pointy enhance from the $25.4 billion that got here due in 2020, in response to CreditSights, a bond-research agency. The majority of the debt—$47.6 billion—is greenback bonds. The CreditSights figures embrace maturing bonds and a smaller sum of puttable debt, which has an extended maturity however which traders have the proper to promote again throughout 2021.

On the identical time, assist from China’s highly effective state banks is waning, earnings are nonetheless recovering after tumbling within the early part of the pandemic and regulators are taking a harder stance on monetary danger within the sector.

To additional complicate issues, worldwide defaults by Chinese language debtors, together with some smaller real-estate corporations, have grown extra widespread lately. And a spate of defaults late final yr by state-linked corporations rattled traders in China’s large onshore bond market, the place property builders are additionally lively debtors in yuan.

Whereas yields are excessive in contrast with many different investments, analysts and traders say the market is probably going to attract sharp distinctions between more healthy and weaker debtors.