After the crisis China Evergrande Group (HK: 3333 ), recently on Sunday (July 3) according to a report sent to the Hong Kong Stock Exchange, Shimao Group (HK: 0813 )) - another Chinese real estate group - announced it was unable to pay the total principal and interest of $1.02 billion worth of foreign bonds with an interest rate of 4.75%. Earlier on Friday (July 1), these bonds of Shimao were trading at only 12.1% of face value, according to data from Duration Finance. In addition, Shimao said it was unable to repay some other foreign principal debts, but did not provide details. Shimao has yet to receive requests to speed up payments from creditors, suggesting that bondholders have yet to take legal action, according to Reuters.
The reasons given by Shimao are "uncertainties in the market regarding debt refinancing" and "challenging operating environment and funding conditions".
This is the first time the Shanghai-based real estate group has missed its foreign debt payments. Refinitiv data shows that Shimao currently has $ 6.1 billion in international bonds, ranking 6th among Chinese real estate enterprises.
The creditors of two of Shimao's syndicated loans have agreed to facilitate the debt-heavy real estate conglomerate. HSBC Bank acts as a focal point to arrange loans in two currencies.
China's real estate sector has recently been rocked by a series of defaults on foreign bonds, the most prominent one being Evergrande. At one time Evergrande was China's biggest revenue-generating real estate company, but now it's the most indebted real estate group in the world.
Three of China's five largest international bond issuers, including Evergrande, Kaisa Group and Sunac China, have all defaulted on their USD bonds.