Property developer Sunac China told some onshore holders it did not rule out an extension proposal for a 4 billion yuan ($630.38 million) puttable bond due April 1, financial intelligence provider REDD reported on Wednesday.
The country’s third-largest property developer by sales previously said it had prepared sufficient funding to repurchase the bond.
The firm also planned to initiate talks with holders of its private offshore debt worth $1 billion, REDD reported, part of which became puttable after Fitch Ratings’s downgrade by three notches on Tuesday.
Sunac flagged its financial difficulties to the People’s Bank of China over the weekend, according to the report. Sunac did not immediately respond to a Reuters request for comment.
The ratings agency cut Sunac’s issuer default rating to “B-” from “BB-“, citing increasing uncertainty over the refinancing of the firm’s onshore and offshore debt maturing over the next few months amid decreasing market confidence.
The developer last week reached an agreement with investors to add a sell-back date of April 2023 for the 4 billion yuan puttable bond due April 2024, on top of an existing option to sell it back this April.
REDD reported on Wednesday that a Chinese bank holding around 1 billion yuan of the bond decided to sell it back, after previously agreeing to hold it for another year.
That left Sunac scrambling for funds as it had planned to use the 1 billion yuan to repay a trust loan.
Shares of Sunac reversed morning losses to gain over 14% in the afternoon, as the broader market jumped over 8.5%.
- Reuters, with additional editing by George Russell
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