China’s leading real estate developer Sunac China Holdings has stated that it did not pay a dollar-bond coupon before the end of deadline on 11 May 2022 and does not think to would be able to make payments on other notes as well.
With this announcement, it has become the country’s latest builder to default after China Evergrande, reported Bloomberg.
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The company stated in a filing to Hong Kong Stock Exchange that its ability to access new financing has remained tough and the recent Covid-19 outbreak in the country has increased the ongoing industry decline in sales.
Since 2021, the country’s property sector has been struggling with debt crisis after a countrywide crackdown. Over a dozen builders could not make payments on offshore notes, including China Evergrande Group.
In April, Sunac did not meet an initial deadline for a $29.5m coupon payment on its 7.95% dollar bond maturing next year. The company had a 30-day grace period to make the payment but this date too expired on 11 May 2022.
This payment was the first of four dollar-bond coupons initially due last month, reported the media outlet.
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By GlobalDataSunac has about dollar bonds outstanding worth of $7.7bn, which is the highest among Chinese developers, as per the Bloomberg-compiled data.
Since September, its shares and dollar bonds have fallen deeply by around 80%, after its subsidiary’s letter to a local government seeking ‘special policy support’ had become public.
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Image: Since 2021, the country’s property sector has been struggling with debt crisis after a countrywide crackdown. Credit: Jason Goh from Pixabay.
