SHANGHAI (Reuters) – Chinese developer Yango Group has asked holders of its asset-backed securities to refrain from requesting a refund for a year amid concerns it would struggle to pay, the provider reported. Redd financial intelligence.
Yango’s 6.5% 1.27 billion yuan ($ 198 million) asset-backed securities mature in November 2022, but give holders the option to demand redemption next month.
In a report released Friday night, Redd cited four anonymous sources as saying the company made the request to investors on Friday, during a closed-door meeting in Shanghai attended by senior executives.
Yango does not intend to provide credit enhancements to encourage cardholders to approve the extension, and executives have said the company “may struggle to pay” if investors refuse to extend the purchase date. , according to the report. No bondholder had approved the plan by the end of the meeting, Redd reported.
The demand comes as a debt crisis within the China Evergrande group has raised concerns among investors around the world over the country’s deeply indebted $ 5,000 billion real estate sector, which is tightening access to the economy. funding for other developers.
Evergrande narrowly avoided a catastrophic default for the second time in a week on Friday, making a last-minute payment on an overdue dollar bond coupon just before its grace period expired.
In addition to its asset-backed securities, Yango has eight US dollar bonds with a total value of $ 2.24 billion and 14 yuan-denominated bonds with a value of 13.1 billion yuan, according to the data. by Refinitiv.
($ 1 = 6.4050 Chinese yuan)
(Report by Andrew Galbraith, edited by William Mallard)