China Aoyuan is the latest Chinese developer to warn of a liquidity crunch as creditors demanded repayment $651.2mn due to a wave of rating downgrades last month. Aoyuan said on Thursday that there was no guarantee it would be able to fulfill its financial obligations and that it has not reached any agreements for the $651.2mn debt. It further warned that non-payment may lead to more creditors demanding repayment or enforce actions causing a ‘material’ adverse impact on its business. Separately, Aoyuan also said that it failed to redeem RMB 672.5mn ($105mn) onshore ABS’ issued by its subsidiaries, but investors had granted an extension of an unspecified duration. This comes after Aoyuan earlier failed to redeem RMB 816mn ($128mn) ABS but got an extension from its holders. In the latest update, Chinese media outlet Yicai reported that Aoyuan proposed repayment plans for ~RMB 6bn ($940mn) worth of WMPs without disclosing the source of the information. It said that one solution was to repay the WMPs by cash installments and another with physical assets like residential units, office, retail and car parking spaces owned by Aoyuan which are worth at least RMB 9bn ($1.4bn).
Aoyuan’s dollar bonds are lower with its 8.5% 2022s down 2.5 points to 25.53 cents on the dollar.
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