Chinese property developer Shimao misses repayment on $1 billion bond

HONG KONG, July 3 (Reuters) – Chinese property developer Shimao Group (0813.HK) has missed the curiosity and principal payment of a $1 billion offshore bond because of on Sunday, in the most up-to-date blow to China’s embattled residence current market.

The non-repayment was the 1st skipped community offshore payment for the Shanghai-centered developer. With an exceptional $6.1 billion global bonds, Shimao is the sixth premier issuer among Chinese developers, according to Refinitiv.

China’s house sector has been strike by a series of defaults on offshore financial debt obligations, highlighted by China Evergrande Team (3333.HK), after the country’s top-marketing developer but now the world’s most indebted property company.

Three of the top 5 issuers – Evergrande, Kaisa Team (1638.HK) and Sunac China (1918.HK) – have already defaulted their dollar bonds.

Shimao was not able to pay out a complete of $1.02 billion in principal and interest to creditors of the 4.75% senior notes, the developer stated in a Sunday submitting on the Hong Kong bourse, citing “current market uncertainties around debt refinancing” and “tough running and funding disorders”.

It extra that it also did not make principal payments less than specific other offshore indebtedness, without the need of offering information.

The developer has not obtained recognize of acceleration of reimbursement from its loan companies, it said, suggesting the debtholders have not moved to take enforcement steps.

Shimao hired Admiralty Harbour Cash as its money adviser and Sidley Austin its authorized adviser to help evaluate and check out ways to take care of the liquidity crisis.

In the meantime, creditors of its two syndicated financial loans have agreed to give the income-strapped Chinese developer a breather.

Shimao reported it experienced obtained created see of aid from the the greater part of the loan companies of two syndicated financial loans agreed on in 2018 and 2019, in which HSBC acted as the guide facilitator for dual forex loans.

The collectors, who are “commonly supportive of the organization continuing to explore the probability of an settlement and implementation of a likely restructuring with its pertinent stakeholders”, had been ready to allow for Shimao to keep on to run the business enterprise with minimal disruption, according to the submitting.

Shimao’s bond in concern traded at 12.141 cents on the dollar on Friday, according to Period Finance.

Shimao has been extending its financial debt obligations onshore and disposing of assets to elevate fund, when its contracted revenue in the first five months dropped 72% from a 12 months in the past.

Reporting by Selena Li and Clare Jim Editing by Louise Heavens and Edmund Blair

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