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Chinese developer Sunshine 100 defaults on $170-m bond

Reuters | | Updated on: Dec 06, 2021
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Sunshine’s default comes days after Evergrande Group announcement regarding debt repayment issues

Chinese developer Sunshine 100 China Holdings Ltd said on Monday that it had defaulted on a $170-million dollar bond due to liquidity issues.

The announcement comes days after bigger rival China Evergrande Group said there was no guarantee it would have enough funds to meet debt repayments.

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It shows some developers continue to struggle even as Beijing has started to marginally relax financing to meet developers’ normal funding needs.

Sunshine 100 said in an exchange filing that it was not able to repay the principal and interest of a 10.5 per cent bond due December 5, “owing to liquidity issues arising from the adverse impact of a number of factors, including the macro economic environment and the real estate industry.”

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The delinquency would also trigger cross default provisions under certain other debt instruments, the company said.

China tightens curbs on real estate

China toughened real estate curbs early this year, exacerbating debt problems at Evergrande and some other highly leveraged developers, triggering fears that their potential collapse could send shock waves through the country’s real estate sector and beyond.

Since October, Chinese regulators have urged banks to relax lending to meet developers’ normal financing needs, and allowed more real estate firms to issue bonds in the domestic market.

Published on December 06, 2021

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