What’s new: Chinese developer Yango Group Co. (000671.SZ) failed to pay $27.3 million of interest on two U.S. dollar bonds initially due Jan. 15 after a 30-day grace period, the company said Friday.
The two bonds are a $300 million, 9.25% U.S. dollar bond due April 2023 and a $357 million, 7.5% bond due April 2024, the company said.
Since the third quarter of 2021, Yango faces not only pressure from regulators to reduce its debt but also a sales decline and liquidity problems.
The default could trigger clauses on domestic bonds and other products, the company said. Even though the two U.S. dollar bonds are exempt from cross defaults on other offshore bonds, the default may still trigger cross defaults on domestic bonds, a person close to the company said.
The background: Chinese developers continue to be under pressure following record defaults last year amid a government clampdown on excessive borrowing and declining home sales.
China Evergrande Group, the world’s most indebted developer, faces a lengthy restructuring after being labeled a defaulter in December.
Shanghai-based developer Zhenro Properties Group Ltd. said Friday that its internal resources may be insufficient to meet debt payment obligations next month. Developer Yuzhou Group Holdings Co. said it wouldn’t pay off two dollar bonds due last month.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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