China Agile Group's overseas bonds defaulted for the first time
Chinese real estate developer Agile Group defaulted on interest payments on its U.S. dollar bonds for the first time and is expected to be unable to meet all payment obligations under its overseas debt. After this news came out, Agile's Hong Kong stock price fell all the way after the market opened. As of noon, the stock price fell nearly 13%.
According to Bloomberg, Agile announced on the Hong Kong Stock Exchange on Tuesday (May 14) that in view of the liquidity pressure faced by the company, the company is unable to pay the interest on the 2020 notes due on Monday (13th) and is expected to be unable to fulfill its overseas obligations. All payment obligations under the Debt.
The above-mentioned notes refer to the senior notes with a coupon of 6.05% due in 2025 issued on October 8, 2020 and November 10, 2020. The amount of the outstanding notes is US$483 million (approximately S$654 million).
Some holders of the notes said Monday they had not yet received interest payments from the troubled housing company. According to the bond issuance document, failure to pay interest payments within the grace period of 30 consecutive days is defined as an "event of default."
Guangdong-based Agile, which has not previously announced any debt defaults, used a grace period last year to defer bond interest payments. However, the market has already anticipated its financial difficulties. The purchase price of its three US dollar bonds due in 2025 ranges from about 8 to 11 cents per US dollar of face value.
Agile said in the announcement that China's real estate industry continues to be in a downward trend. The group's total pre-sales value in the four months ended April 30, 2024 was 6.55 billion yuan (approximately S$1.225 billion), compared with the same period in 2023 and 2022. Decreased 68.0% and 73.9% respectively.
Agile stated that the group will continue to make every effort to advance project delivery in an orderly and practical manner, continue to take measures to accelerate property pre-sales, accelerate the collection of sales proceeds, and make its best efforts to improve its asset and liability position.
Agile said that the company will maintain active communication with creditors and will actively explore the best solutions to achieve long-term sustainable development to safeguard the interests of all stakeholders.