Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Chinese property developer Shimao misses repayment on $1 billion bond

Stock Markets Jul 03, 2022 10:15AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
2/2 © Reuters. The flag of property developer Shimao Group flutters next to a Chinese flag in Shanghai, China January 13, 2022. REUTERS/Aly Song/Files 2/2

By Selena Li and Clare Jim

HONG KONG (Reuters) - Chinese property developer Shimao Group has missed the interest and principal payment of a $1 billion offshore bond due on Sunday, in the latest blow to China’s embattled property market.

The non-repayment was the first missed public offshore payment for the Shanghai-based developer. With an outstanding $6.1 billion international bonds, Shimao is the sixth largest issuer among Chinese developers, according to Refinitiv.

China's property sector has been hit by a series of defaults on offshore debt obligations, highlighted by China Evergrande Group, once the country's top-selling developer but now the world's most indebted property company.

Three of the top five issuers - Evergrande, Kaisa Group and Sunac China - have already defaulted their dollar bonds.

Shimao was unable to pay a total of $1.02 billion in principal and interest to creditors of the 4.75% senior notes, the developer said in a Sunday filing on the Hong Kong bourse, citing "market uncertainties over debt refinancing" and "challenging operating and funding conditions".

It added that it also did not make principal payments under certain other offshore indebtedness, without giving details.

The developer has not received notice of acceleration of repayment from its lenders, it said, suggesting the debtholders have not moved to take enforcement actions.

Shimao hired Admiralty Harbour Capital as its financial adviser and Sidley Austin its legal adviser to help assess and explore ways to manage the liquidity crisis.

Meanwhile, creditors of its two syndicated loans have agreed to give the cash-strapped Chinese developer a breather.

Shimao said it had received written notice of support from the majority of the lenders of two syndicated loans agreed upon in 2018 and 2019, in which HSBC acted as the lead facilitator for dual currency loans.

The creditors, who are "generally supportive of the company continuing to explore the possibility of an agreement and implementation of a potential restructuring with its relevant stakeholders", were willing to allow Shimao to continue to run the business with minimum disruption, according to the filing.

Shimao's bond in question traded at 12.141 cents on the dollar on Friday, according to Duration Finance.

Shimao has been extending its debt obligations onshore and disposing of assets to raise fund, while its contracted sales in the first five months dropped 72% from a year ago.

Chinese property developer Shimao misses repayment on $1 billion bond
 

Related Articles

Tyson Foods earning miss sends shares down 10%
Tyson Foods earning miss sends shares down 10% By Reuters - Aug 08, 2022

(Reuters) -Tyson Foods shares fell 10% on Monday as the U.S. meat processor reported weaker-than-expected quarterly earnings and warned of supply constraints and reduced demand...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (3)
Todd Gray
Todd Gray Jul 03, 2022 3:33PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The Chinese housing market isn't a bad as the press makes you think for these reasons. 1. The Chinese save about 34% of their annual income 2. The Chinese only take out 60% loans, on average. 3. Many homes they buy remain empty. That means most don't rely on any income from rental to live on, so the homes they buy are more like a 401k plan. If their 401k plan is down, that doesn't really change how they live today, provided they keep working and saving that 34% of their annual income every year. They don't like it, but today they're fine. So, they're not a bunch a house flippers who's stream of income has just fallen apart and can no longer live rent free in the ADU that's in the back yard of one of the properties they brag about on YouTube. They're cautious in ways we don't understand. 4. If Chinese RE does dip down to the point it becomes a danger to their rebiplic, the government will promptly step in and deal with it.
tom paj
tom paj Jul 03, 2022 2:54PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
more to come to the surface..
Ron Smith
Ron Smith Jul 03, 2022 1:27PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Damn
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email