Chinese Machine Tool Maker Repays Bond One Day After DefaultingBloomberg News
Dalian Machine Tool had missed deadline on operational reason
Hebei Logistics also paid off notes a day late last week
A second Chinese company in a week defaulted on bonds only to make the payment a day later, highlighting the increasing difficulty firms face meeting debt deadlines as the economy slows.
Dalian Machine Tool Group Corp., based in the northeastern province of Liaoning, defaulted on 212 million yuan ($30.8 million) of principal and interest due Monday on one-year notes due to "system operational reasons," according to a company filing. It paid off the 6 percent securities Tuesday, it said. That comes after Hebei Logistics Industry Group Co. made payment a day late last week.
Chinese companies have increasingly struggled with debt payments as at least 23 onshore bonds defaulted this year, compared with seven in 2015. While the nation’s economy grew at a 6.7 percent pace in the second quarter, the rust belt Liaoning province contracted 1 percent as local heavy industry shrank amid the government’s curb on excess capacity.
— With assistance by Judy Chen