Another Chinese property developer, Yuzhou Group Holdings has defaulted on a dollar bond coupon payment of $21.5mn after it failed to make the payment within the 30-day grace period that ended on March 4. In an exchange filing, Yuzhou said that the missed payment on its $500mn 8.5% 2023s has caused an event of default that may result in accelerated action by bondholders, as per IFR. The developer added however that “no event of default has occurred in respect of any of the Consent Solicitation Notes (other than the 2023 II Notes), the New Notes or the US$300 million senior perpetual securities issued by the Company,” referring to the consent solicitation it launched on 12 of its dollar bonds on January 14. The latest default comes despite the company stating in its January 24 exchange filing that “..no event of default will occur in respect of any of the Consent Solicitation Notes..”
Yuzhou is currently rated Caa2/RD; it was downgraded to RD by Fitch on February 9 after completion of its exchange offer. Yuzhou now joins a rather long list of Chinese property developers that have defaulted on bond payments which include DaFa, Aoyuan, Glory Land, Yango, Kaisa, Evergrande and Sinic to name a few.
Yuzhou’s bonds are currently trading at 12-15 cents on the dollar.
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