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China Xuzhou Zhongsen Missed Bond Coupon Payment: 21CBH

China’s private junk bond market is facing its first casualty after a building materials producer reportedly missed a bond-coupon payment, as the government allows defaults amid steps to rein in credit expansion.

Closely held Xuzhou Zhongsen Tonghao New Board Co., based in the eastern province of Jiangsu, missed a 10 percent coupon payment due March 28 on the 180 million yuan ($29 million) of notes it sold last year, the 21st Century Business Herald newspaper reported yesterday, citing an unidentified person. This would be the first default in the nation’s private-placement market for high-yield bonds from small- and medium-sized enterprises unveiled in 2012, according to Yang Aibin, a general manager at Pengyang Investment Management Co.