Chinese real estate falls apart: Sino-Ocean does not pay debts and Country Garden closes negotiations on defaulted bonds
China's housing crisis worsened as state-backed developer Sino-Ocean Group Holdings missed interest payments and shares of developer Country Garden plunged further after it suspended trading on some onshore bonds.
Developer Sino-Ocean has suspended trading of 6% covered bonds maturing in 2024 on the Hong Kong Stock Exchange due to the non-payment of $20.94 million in interest. The interest covers the period from January 30 inclusive to excluding July 30 by August 13, according to a Monday morning filing.
The default comes amid a deepening slump in the housing market after Chinese developer Country Garden announced over the weekend it would suspend trading on at least 10 onshore bonds issued in 2021 and 2022 starting Monday, August 14.
Shares of Sino-Ocean fell 5.1% to HK$0.37, while Country Garden plunged 17% to HK$0.82.
A gauge tracking Hong Kong-listed mainland developers fell 4.5%, extending a 10% loss last week to hit its lowest level since November 2022.
Sino-Ocean said it is conducting a consensus bid for a deal with bondholders and is expected to approve an extraordinary resolution at an August 17 meeting.
Out of a total of $698 million of outstanding commercial bonds Sino-Ocean e repurchased and canceled $2 million on Monday. A drop in the sea of his debts, which tries to give a minimum of peace of mind to his creditors.
However, it appears increasingly clear that, without direct state intervention, we are heading towards an overall crisis in the debt market of Chinese real estate developers. Sino-Ocean had already been classified CCC+, practically one step before bankruptcy, by Fitch, mainly due to the depletion of its financial resources.
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The article China's Real Estate Falls Apart: Sino-Ocean Doesn't Pay Debts and Country Garden Ends Dealings on Defaulted Bonds comes from Scenari Economici .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/limmobiliare-cinese-va-a-pezzi-sino-ocean-non-paga-i-debiti-e-country-garden-chiude-le-trattative-sulle-obbligazioni-in-default/ on Mon, 14 Aug 2023 09:00:20 +0000.