Chinese developer Yango Group (000671.SZ) has asked holders of its asset-backed securities to refrain from asking for repayment for a year over concerns it would struggle to pay, financial intelligence provider Redd reported.
Yango’s 1.27 billion yuan ($198 million) 6.5% asset-backed securities mature in November 2022 but give holders the option to demand repayment next month.
In a report late on Friday, Redd cited four unnamed sources as saying the company had made the request to investors on Friday, at a closed-door meeting in Shanghai attended by senior executives.
Yango has no plans to provide credit enhancements to encourage holders to approve the extension, and executives indicated the company “could have trouble paying” if investors declined to extend the put date, the report said. No bondholders had approved the plan by the end of the meeting, Redd reported.
The request comes as a debt crisis at China Evergrande Group (3333.HK) has raised concerns among investors globally about the country’s deeply indebted, $5 trillion property sector, tightening funding access 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 outstanding U.S. dollar bonds worth a total $2.24 billion and 14 outstanding yuan-denominated bonds worth 13.1 billion yuan, according to Refinitiv data.
($1 = 6.4050 Chinese yuan)