China's 27th Largest Real Estate Company Zizao Ye Trading Halted... Bond Maturity Default

Creditors Reject Extension Request for $400 Million Maturing Debt
Hyundai Unable to Pay $82.49 Million Interest, Now in Default

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Chinese real estate developer Kaisa's stock trading will be temporarily suspended on the 8th, Chinese media Pengpai reported. Kaisa requested an extension of the maturity for a $400 million (KRW 470.5 billion) dollar bond that matured the previous day from the bondholders but was rejected.

[Image source=Reuters Yonhap News]

Kaisa applied for a payment deferral on the maturing bond on the 3rd, but since the bondholders did not agree, it was effectively in default. To obtain consent, 95% of the bondholders must agree to the payment deferral.

It is known that Kaisa holds a total of $11.6 billion in dollar bonds. Kaisa's real estate sales are reported to rank 27th within China.

Pengpai added that Kaisa's stock closed at HKD 0.92 per share the previous day.

Meanwhile, real estate developer Hengda has effectively defaulted as it failed to pay bond interest due by the 6th. The total interest Hengda must pay is known to be $82.49 million. Despite a 30-day grace period, Hengda failed to make the interest payment on this day.

If Hengda officially declares default, it could lead to a chain default of dollar bonds amounting to a total of $19.236 billion. However, since Hengda's total assets (2.3775 trillion yuan) exceed its total liabilities (1.9665 trillion yuan), there is a possibility that it will enter restructuring such as asset sales rather than bankruptcy proceedings. If, after asset revaluation, total liabilities exceed total assets, Hengda will immediately proceed with bankruptcy proceedings.