Chinese Luxury Developer Fantasia Fails to Repay $206 Million Dollar Bond


Fantasia Holdings Group Co.

1777 1.82%

, a developer of luxury apartments in China, explained it did not make a $206 million U.S. greenback bond payment that was thanks Oct. 4, introducing to the malaise bordering the country’s very indebted house corporations.

The company, which like

China Evergrande Team

EGRNF 14.90%

is based mostly in Shenzhen, said late Monday that it did not shell out the fantastic principal on a 7.375% bond which it issued in 2016. Fantasia initially offered $500 million of this credit card debt and previously this yr acquired again some of the securities.

The recognize of the skipped payment took some marketplace participants by shock. Just days earlier, a Fantasia agent informed buyers that it would make the payment, in accordance to a be aware from Chuanyi Zhou, a credit score analyst at Lucror Analytics. In late September, Fantasia explained a business owned by its founder acquired a tiny portion of the similar bond situation.

Hours prior to Fantasia’s disclosure, Fitch Rankings minimize its score on Fantasia by 4 notches to CCC-, reflecting an exceptionally large possibility of default. The global score firm stated the developer reportedly not too long ago skipped yet another payment on a private bond—which Fitch was previously unaware of—and reported the incident “casts doubt on the transparency of the company’s money disclosures.”

Like its much larger peer Evergrande, Fantasia is mentioned in Hong Kong and was an energetic issuer of higher-generate greenback bonds, which have offered off sharply in the latest months. One of its bonds that comes owing in 2024 was just lately quoted at 24 cents on the greenback, in accordance to Tradeweb. Fantasia, in its current very first-50 percent report, mentioned all over $4.3 billion in superb greenback bonds as of June, such as some issued previously this year with double-digit proportion discount coupons.

Evergrande, China’s most indebted developer and the country’s most significant issuer of junk bonds, skipped interest payments on its greenback credit card debt over the past two weeks, but hasn’t built any community disclosures about the issue. On Monday, a successful residence-management unit of the ailing developer said it could be the issue of a takeover bid, which would deliver much-necessary hard cash to Evergrande.

Fantasia was launched in 1996 by Zeng Jie, also recognized as Baby Zeng, a niece of previous Chinese Vice President Zeng Qinghong. The company is recognized for constructing high-finish household tasks and luxury apartments. Fantasia has dozens of ongoing true-estate assignments in big metropolitan areas across China, in towns which include Beijing, Wuhan, Tianjin and Ningbo.

Fantasia went public in 2009 following raising $400 million. The corporation recently experienced a marketplace capitalization of about $415 million. Its shares have been halted from investing given that Sept. 29 pending a company announcement. Ms. Zeng is its premier shareholder and an government director, in accordance to its annual report.

When in contrast with Evergrande, Fantasia is significantly scaled-down in measurement. Its profits in the very first 9 months of 2021 ranked 73rd between its domestic friends, whilst Evergrande was in third spot, according to a market place report by investigation business CricChina.

“In our watch, this is an challenge of willingness to pay back instead of skill to pay out,” Ms. Zhou of Lucror mentioned of Fantasia’s missed dollar bond payment. She included that the enterprise earlier claimed to have sufficient dollars to fulfill its Oct bond maturity and has achieved some of its other obligations.

Fantasia did not immediately answer to a ask for for comment on Tuesday. In its Monday regulatory filing, the business reported its board and management will assess the possible impression of the nonpayment on its fiscal situation and income place and provide updates if there are further developments. It also stated its shares would remain suspended from investing.

Fantasia noted the equivalent of $1.7 billion in income for the initial 6 months of 2021, up 18.5% from a calendar year earlier, and net income of $23.7 million. The business claimed it attained “excellent product sales performance” in the course of the period and documented contracted property gross sales of $4.36 billion, up 61% from a yr before.

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