Guangzhou R&F considers ‘holistic’ solution after bond payment miss

GUANGZHOU R&F Properties is considering a “holistic” solution for its offshore debt after missing US$147 million of coupon payments on already-extended US dollar notes, underscoring the deepening liquidity crisis in China’s property sector.

The subsidiary, Easy Tactic, hasn’t paid within a 30-day grace period, according to a company statement on Sunday (Aug 11). The three US dollar bonds in question are due 2025, 2027 and 2028, with about US$4.5 billion of total principals remaining. The non-payment may drive bondholders to demand accelerated repayment, the statement said.

The disclosure is the latest sign of Chinese developers’ struggles to meet debt obligations amid a years-long property crisis. Restructuring talks could resurface even as Guangzhou R&F attempts to ease liquidity pressures by accelerating pre-sales and collection of sales proceeds and selling assets.

“The company is in discussions with the holders of the Easy Tactic Notes for an amicable solution and will continue to closely monitor the situation and consider all possible actions including but not limited to the formulation of a holistic liability management solution,” it said.

The company defaulted on a US dollar debt two years ago but came to an agreement with creditors to amend and delay repayment on US dollar-notes sold by Easy Tactic.

For its latest talks with creditors, Guangzhou R&F has engaged Alvarez & Marsal as its financial adviser and Sidley Austin as legal adviser. BLOOMBERG