Sunac, China’s fourth-largest developer by sales, to delay payment of US$345 million onshore bond due on Monday, sources say

It wants to repay the principal in four instalments over the next two years, sources say

Sunac sold only 12.85 billion yuan worth of homes in May, a 82 per cent drop compared with a year ago and a 6 per cent drop since April

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Sunac has already failed to pay US$29.5 million in interest on a US-dollar bond and was in default after a 30-day grace period in May. Photo: Shutterstock Images

Published: 10:30am, 9 Jun 2022

Heavily-indebted Chinese property developer Sunac China hopes to extend the deadline of an onshore bond maturing soon.

China’s fourth-largest developer by sales, Sunac plans to meet creditors this week and propose a delay in the payment of a 2.3 billion yuan (USS$345 million) bond due on next Monday, sources said late on Wednesday.

It wants to repay the principal in four instalments over the next two years, they added. It will repay 10 per cent, 15 per cent, 20 per cent and 55 per cent of the principal of the yuan-denominated bond every six months through June 13, 2024.

As far as interest is concerned, the firm chaired by Chinese property mogul Sun Hongbin will offer to pay only the interest on maturity on June 13. The interest, at an unchanged 7 per cent coupon rate, will be delivered semi-annually over the two years as well.

The developer failed to pay US$29.5 million in interest on a US-dollar bond earlier and was in default after a 30-day grace period on May 12. It also said in a filing to the Hong Kong stock exchange the same day that it did not expect to make payments on three additional notes.

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