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The private banking units of Citigroup and Credit Suisse Group have stopped accepting the bonds of Fantasia (1777) as collateral amid rising concerns about the Chinese developer's financial health, according to insiders.

The banks have assigned a zero lending value to the notes, meaning their private-wealth clients can no longer use them as security for loans.

The development underscores concerns about Fantasia as it joins a slew of smaller Chinese developers under stress. Its longer-tenor notes have plummeted and were the worst performers in August.

Meanwhile, an investment bank and credit rating agency downgraded China Evergrande (3333).

Goldman Sachs changed it from "neutral" to "sell" with a target price of HK$3.

Moody's Investors Service said it had downgraded its corporate family rating to Ca from Caa1, and cut its senior unsecured ratings to C from Caa2 with a negative outlook. Evergrande tumbled 7.75 percent.

Separately, real estate firm Oceanwide Holdings is seeking to offload its main office complex in Beijing, according to insiders, to raise cash after a unit defaulted.

It has been in talks to sell Minsheng Financial Center to China Taiping Insurance Group.

Oceanwide's asking price has been a sticking point, with the two sides currently discussing a potential price tag of about 20 billion yuan (HK$24.07 billion), one said.

Fantasia latest developer hit by cash woes