A state-owned coal miner that abruptly defaulted on a 1 billion yuan ($152.5 million) bond last week is seeking extensions for repayment of the debt as well as several other bonds, sources with knowledge of the matter told Caixin.
China Everbright Bank Co. Ltd., the lead underwriter of the defaulted ultra-short-term bond issued by Yongcheng Coal and Electricity Holding Group Co. Ltd. in February, has asked bondholders if they will accept a 270-day extension for repayment of the principal, the sources said. The Henan province-based company paid all of the 32.4 million yuan in overdue interest on the bond on Friday, three days after it defaulted.
Both the principal and interest payments on the 270-day bond were due Nov. 10.
The extension plan requires approval from all bondholders, but they hold different opinions, Caixin has learned. Some said they intend to agree to the plan, but demand that the company should not transfer assets within 270 days, and that its cash flow be closely monitored. Meanwhile, some others said no and demanded immediate repayment.
Yongcheng Coal also asked bondholders through the underwriter if they could accept extensions for all its other ultra-short term bonds by 270 days and its three-year medium-term notes by one and a half years, the sources said.
Yongcheng Coal’s unexpected default shocked markets as it just got the highest AAA long-term issuer credit rating from China Chengxin International Credit Rating Co. Ltd. last month, which was lowered to BB (link in Chinese) last week. Some state-owned coal miners’ bonds plunged after the default, and some either canceled their bond issuance plans or slashed their fundraising targets amid investors’ worries about the Chinese onshore corporate bond market.
Wang Juanjuan and Liang Hong contributed to this report.
Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Yang Ge (geyang@caixin.com)
