Investors of Chinese developers’ onshore notes are increasingly pushing back on requests to delay principal payments.
(Bloomberg) — Investors of Chinese developers’ onshore notes are increasingly pushing back on requests to delay principal payments.
Sino-Ocean Capital Holding Ltd. said Monday night that holders of a 1 billion yuan ($137 million) note voted against extending the bond by another year. The affiliate of Chinese state-backed developer Sino-Ocean Group Holding Ltd. instead won a 90-day grace period involving any event of default involving the bond.
Country Garden Holdings Co. twice delayed the end of voting on the extension of a yuan note in August before ultimately winning bondholder approval to stretch payments into 2026. China’s former largest builder overcome opposition from a group of investors who sought to have the note declared to be in default.
The country’s property firms have repeatedly asked noteholders to extend due dates or launch bond exchanges in order to avoid missed payments, as the sector’s debt crisis enters its fourth year. Offshore-bond defaults hit a record in 2022, and the figure is on pace to be topped this year with delinquencies exceeding $40 billion, according to data compiled by Bloomberg.
Country Garden has delayed voting deadlines for at least two of the eight yuan notes the firm sought to stretch payments on by three years, according to bondholders familiar with the matter. The eight securities have a combined 10.8 billion yuan of principal outstanding. Reuters reported that Country Garden received creditor approval to extend the other six notes, citing two sources familiar with the matter.
A unit of Sino-Ocean Group lost a bondholder vote more than a month ago for a 1-year extension, with investors instead granting a 30-day grace period. The payment extension was ultimately approved in a second vote later in August.
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