Chinese Property Developer Sino-Ocean Group Asks Bondholders To Delay Interest Payments

Sino-Ocean Group Holding Limited SIOLY became the latest in a long line of Chinese property developers to default on its bond repayments after asking its creditors to wait a further two months for scheduled interest payments Friday.

The announcement follows a freezing of $4 billion of offshore debt by the company last month.

Sino Ocean issued 3 billion RMB ($410 million) of 10-year bonds in 2015 which pay annual interest of 4.76% every year on October 16. This year, the company said that it would not be able to make those interest payments on time, and is asking its debtholders to wait until December to receive them “in light of the current operation conditions” of the company.

Sino Ocean also cautioned its bondholders that it may not be able to make the December payment deadline too, saying that if it couldn’t it would come up with a new payment plan for the note holders.

“In the event that it is anticipated that it will not be able to repay the principal and/or interest of the Corporate Bonds as scheduled, or it will fail to repay the principal and/or interest of the Corporate Bonds as scheduled when they become due, it will formulate a reasonable debt repayment plan and proposal in a timely manner for the consideration of the holders,” Sino Ocean said in a stock exchange announcement.

No additional interest would be offered to creditors for the delayed interest payment, the company said, whom it asked to vote on the proposal on Monday.

With this latest announcement by Sino-Ocean, there are now just 13 major Chinese property developers out of 54 who have not defaulted on their junk debt. (See previous article on this at Benzinga here.)

The largest defaulters so far have been Country Garden Holdings Limited CTRYF and China Evergrande Group EGRNQ, the latter of which is undergoing legal troubles arising from its chaotic debt structuring problems.