Standard & Poor's Ratings Services cut its credit rating on the company to BB - from BB, saying it believed the "developer's leverage could deteriorate".

In September, Fitch Ratings downgraded the builder to BB - from BB, citing "a large increase in its net debts".

Shui On Land Ltd, controlled by Hong Kong billionaire Vincent Lo, got investors in December to accept the covenants on its bonds due in 2019 to be applied to its other dollar-denominated and offshore renminbi notes. The company's securities have been the worst performers in the sector in the past six months, excluding Agile Property Holdings Ltd, which was affected by the house arrest of its chairman, according to Bloomberg data.

Builders in China are being hit by rising debt levels as gross domestic product is set to expand 7.3 percent, the least in more than two decades, according to estimates in a Bloomberg survey. Property development contributed 16 percent to economic growth in the country last year, the World Bank says.

Premier Li Keqiang is opening financing channels, easing property restrictions and driving benchmark yuan borrowing costs lower to support the industry. The yield on the 10-year government bond has declined 86 bps this year to 3.7 percent.

"I guess it's not surprising to see issuers try to improve their financial wiggle-room," said Tim Jagger, senior vice-president and portfolio manager at Aviva Investors Global Services Ltd, which had the equivalent of $374.4 billion under management as of June 30, by e-mail last Wednesday.

Better companies do not face much higher risk and should be able to roll over their debt, Adrian Zuercher, head of Asia asset allocation in Hong Kong at UBS AG, said by phone.

"We are more constructive lately after the selloff in high-yield bonds, given the widening spreads."

Kaisa Group Holdings Ltd and Future Land Development Holdings Ltd also issued debentures in the past year and then asked investors to change the terms of their existing publicly traded debt.

"It seems that complacency and bankers' refusal to budge due to the strong demand for bonds have led companies to just print deals with weaker language," Chia said.

Lower prices challenge developers	Everbright's stock earnings slumped in 2013