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Chinese Builders Scramble for Ways to Avoid Bond Defaults

Bloomberg
Bloomberg10/11/2021 05:30 PM GMT+08  • 3 min read
Chinese Builders Scramble for Ways to Avoid Bond Defaults
Evergrande isn't the only developer in trouble. Modern Land and Xinyuan are asking for 3-month extensions on maturing dollar bonds
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(Bloomberg) --Chinese builders are looking to payment extensions or debt exchanges to avoid default on imminent bond obligations as liquidity conditions tighten for the real estate sector.

Modern Land (China) Co. is asking holders for a three-month extension on US$250 million dollar bond due to mature Oct. 25 while also announcing two top executives plan to loan the builder about US$125 million. Xinyuan Real Estate Co. has proposed paying just 5% of principal on a note due Oct. 15 and swapping that debt for bonds due 2023. Fitch Ratings called the move a distressed debt exchange while downgrading the firm to C.

Modern Land and Xinyuan respectively have US$1.35 billion and US$760 million of dollar bonds outstanding, according to data compiled by Bloomberg. In comparison, China Evergrande Group has US$19.2 billion.

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