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Bond Market News

KWG’s Dollar Bonds Plummet Following Default On Local Bond

KWG’s dollar bonds plummeted after the developer defaulted on its RMB 212mn ($31mn) bond principal payment that was due on Friday. The default has now led to RMB 31.2bn ($4.5bn) of its debt accelerated to be repayable on demand. KWG said it will seek agreements with lenders of the defaulted and cross-defaulted notes that they not exercise their rights for immediate repayment. In an exchange filing, KWG said that the multiple uncertainties faced by them “cast significant doubt on the Group’s ability to continue as a going concern”. The news put back into place, fears about the property sector following Wanda Properties’ liquidity issues that were in focus last month.

KWG’s dollar bonds have already been trading in distressed territory and plunged deeper into distress. The company has $137.6mn of payments due this month on its dollar bonds. Its dollar bonds fell over 6 points across the curve, and are trading at 12-13 cents on the dollar.

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