(Bloomberg) — China’s troubled developers have given off more signs of strains this week, as one of the nation’s 20 largest builders failed to make two dollar-bond interest payments.
Yango Group Co., a Shanghai-based developer that operates in more than 100 cities across the country, didn’t make a combined $27.3 million of interest payments initially due Jan. 15 by a 30-day grace period, according to a Shenzhen stock exchange filing. The company, whose 2021 contracted sales were 19th highest according to China Real Estate Information Corp., said it is facing a temporary cash flow issue and plans to hold a bondholder meeting.
The missed coupons come two months after parent Fujian Yango Group Co. said it failed to pay interest a dollar bond.
Chinese developers continued to be under pressure following record defaults last year amid government clampdown on excessive borrowing, which have helped to drag down primary issuance in Asia to its weakest annual start since 2019. Despite Beijing’s plan to garner support from bad-debt managers to aid the sector and easing property-loan curbs, many builders continue to struggle amid slumping new-home sales while investor confidence wanes.
Yango Justice International Ltd., the Yango Group unit which issued the two dollar bonds with the missed coupons, received bondholder approval in November to exchange three other notes amid efforts to extend maturities. The new bond, due in September, was indicated down 2.1 cents on the dollar at 14.3 cents, according to Bloomberg-compiled prices.
Yango Group, which didn’t respond to Bloomberg requests for comment Friday, recently won bondholder approval to extend the interest payment for an onshore note by six months, according to a local media report. The firm has $846 million of dollar-bond interest and maturities coming due the rest of this year, according to Bloomberg-compiled data.
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