Times China has been downgraded from CCC+ to C following its failure to pay the coupon payments on its $350mn 5.75% 2027s and $500mn 6.75% 2023s, which were due on 14 July and 16 July respectively. It is currently in its 30-day grace period before it is considered to have defaulted on its bond obligations. Fitch expects Times China to attempt to finance the repayment primarily through sales proceeds and asset disposals because of limited access to funding amid the Chinese property market turmoil. However, Times China’s operating cashflow has generally weakened over the course of H1 2022 with contracted sales declining 40% YoY to RMB 5.2bn ($770mn) in June. There is however a slight improvement of 14% MoM. The Chinese developer currently has a total of RMB 2.7bn ($400mn) in onshore bonds maturing in the next four months and RMB 11.9bn ($1.76bn) of debt maturing in 2023.

Times China’s 6.75% 2023s are currently trading at 14.4 cents to the dollar, lower by 1.31 points. Its dollar bonds are generally trading at distressed levels of ~9 to 20.

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