Chinese Property Developer Ronshine Default on Bonds

According to reports, Ronshine China Holdings Co.,Ltd, a real-estate giant, announced that it cannot pay up bond interest due on July 10th, becoming one of the many Chinese property developers that are defaulting on bonds.

 Ronshine announced in a document submitted to Hong Kong Stock Exchange on Sunday, that the company has yet to pay $127.98 million of interest for a bond at an interest rate of 8.1% maturing in June 2023. The interest is due on June 9th, with a grace period of 30 days.

 Moreover, the company suggested that it cannot pay another bond interest of $150.7 million due on June 15th, with 30 days of grace period. The bond is supposed to mature on December 2023.

 In response, Ou Zonghong said that, regarding current liquidity problems the company faces, it cannot guarantee interest payment of these priority bond or other priority bonds.

 In response to such matters, the company wished the creditors may provide more time for it to resolve liquidity issues. Currently, the company is facing difficulty, and is now consulting experts and negotiating with overseas creditors for a solution.

 Since Chinese real-estate giant Evergrande declared default, real-estate developers in China went down a spiral of defaults. Particularly, Evergrande is considered to be the most prominent player in mainland-Chinese real-estate market. In contrast, Evergrande became the most debited company in the world.

 Likewise, another Chinese property developer Shimao Group failed to pay a $1 billion bond matured a week ago.

 From this perspective, three of the top five debtors in Communist China, namely Evergrande, Kaisa Group and Ronshine all defaulted on dollar-nominated bonds. This sends a strong signal that economic recession is coming.