According to Reuters, China’s major developer, Sunac, missed coupon payment after the deadline on Wednesday.
The company failed to make an interest payment of 29.5 million on a 742 million dollar offshore bond after the grace period expired. It will not likely make payments coming due on 3 other bonds.
In total, Sunac will be missing four interest payments of 104 million dollars this month after the grace period.
China’s third-largest property developer by sale Sunac stated in a filing to the Hong Kong stock exchange that securing new financing remains hard, while its sales dropped sharply.
According to Bloomberg, Sunac has been under scrutiny for months. The company has $7.7 billion of dollar bonds outstanding, one of the highest among Chinese property developers. Its stocks and dollar bonds have plunged about 80% since September 2021, when one of its subsidiaries sent a letter to a local government asking for “special policy support” leaked to the public.
China’s property industry has been in a debt crisis after the Chinese regime cracked down on the sector last year, causing multiple defaults. Many of China’s real estate developers have missed bond payments, including top giant Evergrande Group.
In March, credit rating agency Moody’s downgraded the company’s rating over the funding concern amid its large upcoming debt maturities.
In April, Sunac transferred a project company in Guangzhou to state-owned developers. Earlier, the company also sold its assets to state-owned buyers, including Beijing Capital Group and Huafa Group.