Advertisement
Cifi defaults on bond, triggering sell-off of developers, fears Chinese property debt crisis is spreading
- Cifi Holdings defaults on US$318 million convertible bond due 2025, blaming the National Day holiday for the delayed payment
- Bonds and shares of Country Garden, Longfor and Seazen slump as investor confidence ‘totally collapses’
Reading Time:2 minutes
Why you can trust SCMP
1
Chinese property developer Cifi Holdings has failed to make a bond payment, marking its first offshore default as the debt crisis gripping the property sector spread to companies previously deemed financially sound.
Advertisement
Bondholders of Cifi’s HK$2.5 billion (US$318 million) convertible bond with an interest rate of 6.95 per cent due in 2025 did not receive the payment they were due on October 8 – payable on Monday as October 8 fell on a weekend – according to a notice from China Construction Bank (CCB), a trustee of the creditors.
Cifi’s shares plunged by more than 10 per cent on Thursday after the developer confirmed the missed payment in a filing to the Hong Kong stock exchange.
The Shanghai-based home builder blamed the National Day “golden week” holiday for the delayed payment and said it was working with creditors to find a solution.
“A notice has been sent to the issuer and subsidiary guarantors informing them that an event of default has occurred,” CCB said.
07:21
Growing anger over China’s unfinished ‘rotten tail’ buildings: ‘We really need this home’
Growing anger over China’s unfinished ‘rotten tail’ buildings: ‘We really need this home’
Until recently the private developer was seen as having a relatively healthy balance sheet, a view further buoyed by a government pledge to guarantee its onshore bonds.
Advertisement