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China's Kaisa bonds tumble after landmark default
[HONG KONG] Bonds of troubled Chinese developer Kaisa Group traded down on Tuesday in volatile trade after a landmark default on its coupon payment.
Overnight, the borrower said it had failed to pay a coupon on its bonds due 2017 and 2018 within the grace period for the payment, becoming the first Chinese developer to default on its dollar bonds.
The sector accounts for some 15 per cent of China's GDP and was the source of 61 per cent of high-yield bonds issued by Asian companies, excluding Japan and Australia, in the US dollar market in 2014, according to Thomson Reuters data.
Trading in the bonds was volatile on Tuesday with initial indications showing a price fall of as much as 10 points.