China Fishery Downgraded to Default at Fitch After Coupon Miss

  • Fitch cuts bond rating to `restricted default' on nonpayment
  • Company in talks with bondholders to restructure dollar notes

China Fishery Group Ltd.’s credit rating was downgraded by Fitch Ratings to Restricted Default after the Hong Kong-based company failed to pay a semi-annual coupon within a grace period.

The seafood supplier didn’t pay the coupon on $300 million of its July 2019 securities when the 30-day grace period expired on Feb. 29, Fitch said in a statement. The rating assessor kept its score on the notes themselves at C with a recovery rating of RR4. The RR4 grade implies that, given an event of default, bondholders may get only 31 percent to 50 percent of their principal and interest.

Geoffrey Walsh, a spokesman in Hong Kong for China Fishery Group, couldn’t be reached for comment by phone and there was no immediate reply to an e-mail seeking comment.

The 9.75 percent notes were little changed at 64.6 cents on the dollar as of 4:39 p.m. in Hong Kong, according to Bloomberg-compiled prices. The securities have more than doubled from an all-time low of 30.3 cents in November, when a Hong Kong court appointed provisional liquidators to the company. Control of China Fishery has since returned to the management after courts in Hong Kong and Cayman Islands removed its provisional liquidators.

China Fishery Group said in December that it had received proposals for its fishery assets in Peru, with two two bids valuing the business at $1.7 billion.

Investors holding more than 40 percent of the outstanding amount of its $300 million bonds have formed an ad-hoc committee and the firm is in discussion with the group regarding a potential debt restructuring, Fitch said. A successful sale of the Peru business at the suggested valuation should raise more than sufficient cash to cover all of the company’s outstanding debt, it added.

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