One of China’s struggling property developers, Yuzhou Group Holdings, said it will not pay off two dollar bonds that are due this week, resulting in some level of default, reports Bloomberg. Earlier this month the developer offered to exchange the notes for new debt, and investors swapped the majority of their holdings. Leaving $104.9 million of combined principal remaining, Yuzhou said in a Monday stock exchange filing, and it’s choosing not to pay that while planning to relaunch the exchange offer this week.
“Certain events of default will occur in respect of” the two dollar bonds, the company said, but that won’t be the case for its other such debt. Yuzhou has $5.7 billion of dollar notes outstanding.
The company’s pending missed payments follow peer DaFa Properties Group saying it didn’t pay off the remainder of a dollar bond due last week that was part of its own debt swap. Such exchanges have been among the ways Chinese builders have been attempting to avoid defaults, as missed payments in the sector hit a record last year. Questions about their ability to meet debt obligations helped fuel big swings last week in developers’ dollar bonds.