State-owned coal company Jizhong Energy Group missed part of its payments on two bonds that came due Friday, several of its bondholders told Caixin.
Jizhong Energy, backed by the Hebei provincial government, transferred the principal of RMB 500 million ($77 million) of one bond but failed to pay the interest, meaning Shanghai Clearing House was unable to distribute the money to bondholders. For a different bond, the coal miner missed the payment entirely, Caixin understands.
One bondholder source said the Hebei government had helped Jizhong Energy obtain funds from a state-owned enterprise (SOE) credit protection fund, but because of the short notice the money arrived too late. “They are supposed to pay on Monday,” the source said, reported Caixin.
Friday’s missed payments added to investor concerns about hidden risks in China’s bond market, and exemplified debt-ridden SOEs’ struggles to avoid defaults amid a regulatory crackdown on misconduct in the bond market.