Tsinghua Unigroup Defaults Push Up China’s 2021 Offshore Sum
A person and a child walks along a promenade in Hong Kong, China. (Photographer: Chan Long Hei/Bloomberg)

Tsinghua Unigroup Defaults Push Up China’s 2021 Offshore Sum

A series of bond defaults by Tsinghua Unigroup Co. has pushed up the total value of defaults in China’s offshore market this year to almost a third of 2020’s total.

Unigroup defaulted on $2 billion worth of notes in January, comprising the majority of the $2.7 billion total value. Solar power operator GCL New Energy Holdings Ltd. defaulted on a $500 million note on Jan. 30, while Macrolink Global Development Ltd. missed a payment on a $208 million bond on Jan. 4.

In 2020, 13 Chinese companies defaulted on bonds in the offshore market, worth a combined $8.2 billion. They included Unigroup, a university-backed chipmaker, which suffered its first dollar bond repayment failure in December.

Tsinghua Unigroup Defaults Push Up China’s 2021 Offshore Sum

Defaults among Chinese borrowers are likely to increase this year, according to Cecilia Chan, a Bloomberg Intelligence analyst. “Despite the government’s implementation of top-down policy easing, companies have limited access to refinance their capital, which may worsen if the government looks to tighten monetary policy after a recovery in economic growth.“

©2021 Bloomberg L.P.

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