China Steelmaker Defaults on Bonds for Fourth Time in Two Months

  • Dongbei Special didn't make payment due May 5: clearing house
  • Chinese firms are struggling with record debt repayments

Dongbei Special Steel Group Co. defaulted on bonds a fourth time since March, highlighting spreading credit woes among Chinese firms as economic growth slows.

The maker of alloy steels used in machinery and car parts failed to make principal and interest payment due Thursday on 700 million yuan ($107.6 million) of bonds with a 5.88 percent coupon, the Shanghai Clearing House said in a statement Thursday. The company sold the securities in 2015, according to data compiled by Bloomberg.

Chinese firms are struggling with record debt redemptions this year as Premier Li Keqiang seeks to wipe out zombie corporations amid the country’s weakest economic expansion in a quarter-century. At least eight firms have missed local note payments this year, already exceeding the tally for the whole of 2015.

The steelmaker had missed separate bond payments on March 28, April 5 and April 13.

— With assistance by Judy Chen

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