China City Construction Pays Missed Bond Coupon After Defaultby
Beijing-based builder missed interest payment on Monday
$2.6 billion of notes still outstanding, one due next week
China City Construction Holding Group, a troubled Beijing-based builder, paid interest on a local bond that it had defaulted on earlier this week.
The China Central Depository & Clearing Co. said Wednesday that it had received payment from the company for a coupon due Monday on a five-year security. The 1 billion yuan ($145 million) 5.55 percent note matures in November 2017. Earlier this year, a Hong Kong unit of the firm also defaulted on 2.5 billion yuan of Dim Sum bonds after a change in ownership triggered early redemption.
Chinese companies have increasingly struggled to meet debt payments, with at least 24 onshore bonds defaulting this year, compared with only seven in 2015. Two other firms in the nation failed to make payments on local bonds last month, though they made good on the obligations a day late.
Liquidity pressure is mounting for China City Construction, which has total outstanding local and overseas bonds of about 18.2 billion yuan ($2.6 billion), including a 1.55 billion yuan local security coming due next week.
The contractor has gone through a series of shareholder changes, announcing in April that it was 99 percent held by Huinong Fund, after former owner China City Development Academy’s stake plunged. In August, it said it had returned to “state control” after Beijing MIC Investment Co. took a 51 percent stake.