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SINGAPORE—
Fantasia Holdings Group Co.
1777 1.82%
, a developer of luxurious flats in China, stated it didn’t make a $206 million U.S. greenback bond cost that was due Oct. 4, including to the malaise surrounding the nation’s extremely indebted property firms.
The corporate, which like
China Evergrande Group
EGRNF 14.90%
is predicated in Shenzhen, stated late Monday that it didn’t pay the excellent principal on a 7.375% bond which it issued in 2016. Fantasia initially bought $500 million of this debt and earlier this 12 months purchased again a few of the securities.
The discover of the missed cost took some market members abruptly. Simply days earlier, a Fantasia consultant informed buyers that it could make the cost, in line with a observe from Chuanyi Zhou, a credit score analyst at Lucror Analytics. In late September, Fantasia stated an organization owned by its founder purchased a small portion of the identical bond problem.
Hours earlier than Fantasia’s disclosure, Fitch Rankings reduce its ranking on Fantasia by 4 notches to CCC-, reflecting a particularly excessive danger of default. The worldwide ranking agency stated the developer reportedly not too long ago missed one other cost on a non-public bond—which Fitch was beforehand unaware of—and stated the incident “casts doubt on the transparency of the corporate’s monetary disclosures.”
Like its bigger peer Evergrande, Fantasia is listed in Hong Kong and was an lively issuer of high-yield greenback bonds, which have bought off sharply in latest weeks. Considered one of its bonds that comes due in 2024 was not too long ago quoted at 24 cents on the greenback, in line with Tradeweb. Fantasia, in its latest first-half report, listed round $4.3 billion in excellent greenback bonds as of June, together with some issued earlier this 12 months with double-digit share coupons.
Evergrande, China’s most indebted developer and the nation’s largest issuer of junk bonds, missed curiosity funds on its greenback debt during the last two weeks, however hasn’t made any public disclosures concerning the matter. On Monday, a worthwhile property-management unit of the ailing developer stated it might be the topic of a takeover bid, which might deliver much-needed money to Evergrande.
Fantasia was based in 1996 by Zeng Jie, often known as Child Zeng, a niece of former Chinese language Vice President Zeng Qinghong. The corporate is thought for constructing high-end residential tasks and luxurious flats. Fantasia has dozens of ongoing real-estate tasks in main metropolitan areas throughout China, in cities together with Beijing, Wuhan, Tianjin and Ningbo.
Fantasia went public in 2009 after elevating $400 million. The corporate not too long ago had a market capitalization of about $415 million. Its shares have been halted from buying and selling since Sept. 29 pending an organization announcement. Ms. Zeng is its largest shareholder and an government director, in line with its annual report.
In comparison with Evergrande, Fantasia is considerably smaller in dimension. Its gross sales within the first 9 months of 2021 ranked 73rd amongst its home friends, whereas Evergrande was in third place, in line with a market report by analysis agency CricChina.
“In our view, this is a matter of willingness to pay as an alternative of means to pay,” Ms. Zhou of Lucror stated of Fantasia’s missed greenback bond cost. She added that the corporate beforehand claimed to have sufficient money to satisfy its October bond maturity and has met a few of its different obligations.
Fantasia didn’t instantly reply to a request for touch upon Tuesday. In its Monday regulatory submitting, the corporate stated its board and administration will assess the potential impression of the nonpayment on its monetary situation and money place and supply updates if there are additional developments. It additionally stated its shares would stay suspended from buying and selling.
Fantasia reported the equal of $1.7 billion in income for the primary six months of 2021, up 18.5% from a 12 months earlier, and internet revenue of $23.7 million. The corporate stated it achieved “wonderful gross sales efficiency” through the interval and reported contracted property gross sales of $4.36 billion, up 61% from a 12 months earlier.
—Alexander Saeedy in New York contributed to this text.
Write to Serena Ng at serena.ng@wsj.com
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