At least two holders of a Sino-Ocean Group Holding Ltd. dollar bond have yet to receive a coupon payment that was due Thursday, heightening debt worries surrounding the Chinese state-backed developer that’s shaken the nation’s junk-note market in recent weeks.
(Bloomberg) — At least two holders of a Sino-Ocean Group Holding Ltd. dollar bond have yet to receive a coupon payment that was due Thursday, heightening debt worries surrounding the Chinese state-backed developer that’s shaken the nation’s junk-note market in recent weeks.
The creditors, who requested anonymity discussing private matters, said they hadn’t received interest due on a 2025 bond as of 9:30 a.m. Friday in Hong Kong. The payment, which a company representative told some investors earlier this week it was still actively raising funds for, has a 14-day grace period before an event of default could occur. The total due is $7.02 million, according to data compiled by Bloomberg.
A Sino-Ocean investor-relations representative didn’t immediately comment when reached Friday.
The builder has been at the center of the sector’s debt worries in recent months even while so far avoiding repayment issues that hit some fellow government-linked peers. The two major state-owned shareholders of Sino-Ocean, China’s 25th-largest builder by contracted sales, engaged with an outside party to conduct due diligence on the firm. Nearly all of its dollar bonds are at deeply distressed levels of 15 cents or less, Bloomberg-compiled prices show.
Sino-Ocean faces nearly $380 million of bond obligations in the third quarter, including a $9.5 million coupon that’s initially due Friday. That payment also has a 14-day grace period.
HSBC Holdings Plc credit analyst Keith Chan predicted earlier this month that the developer would suspend servicing offshore debt and pursue a holistic restructuring.
Sino-Ocean bonds have risen somewhat this week after some logged record declines last week, including a 2 billion yuan ($280 million) note that is scheduled to mature Aug. 2. That security trades at less than half of face value.
–With assistance from Alice Huang and Dorothy Ma.
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