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HONG KONG (Reuters) -Property developer Sunac China did not make an interest payment on a $742 million offshore bond by the time a grace period expired and expects it will not make payments on other bonds coming due, the company said on Thursday.
It had been due to pay $29.5 million in interest on the October 2023 bond that was required to be repaid last month.
Sunac, which is mainland China’s third-largest developer by sales, said it had also not made interest payments on three other offshore bonds that are currently in a grace period of 30 days.
Sunac said the outstanding amount on the October 2023 bond was now $742 million.
“The Group’s contracted sales have continued to decline significantly, while access to new financing has become increasingly difficult with more liquidity issues occurring among certain property developers,” it said in a statement to the Hong Kong stock exchange.
“The Company does not expect that it will make payments under the abovementioned notes and other senior notes issued by it when they become due or within the relevant grace periods,” it said.
Sunac said missing the October 2023 payment meant bondholders could seek the immediate repayment of the principal and interest but it had not received any “acceleration notices” from those holders.
It said it was working with the bond investors on a resolution within a “reasonable period of time”.
Sunac has missed four dollar coupon payments totalling $104 million since April.
It is the fourth-largest bond issuer among Chinese developers after China Evergrande Group (3333.HK) and Kaisa Group (1638.HK), and top seller Country Garden (2007.HK), which is still deemed financially sound.
The company has hired Houlihan Lokey (NYSE:HLI) as financial advisor and Sidley Austin as a legal adviser, it said in the statement.
