A booth of Sunac China is seen at a housing fair in China, May 16, 2014. Developer Sunac China missed the deadline for coupon payments on a $742 million offshore bond and said on Thursday it doesn’t expect to make payments coming due on other bonds, adding to a wave of defaults in China’s debt-laden property sector.
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Shares of Sunac surged on Tuesday after the beleaguered Chinese property developer said it has started executing its plans to overhaul its debt after satisfying restructuring conditions.
Hong Kong-listed shares of Sunac jumped 21% to 2.820 Hong Kong dollars, trading at its highest level in two months.
The restructuring involves a full discharge and release of the Sunac’s existing debt in exchange for the issuance of the new notes.
Sunac’s creditors approved its offshore debt restructuring plan in September though which its debt would be exchanged into convertible bonds backed by its Hong Kong-listed shares, along with new notes with maturities of between two and nine years.
Late last month, China signaled support for property developers and resolving local government debt problems.
The real estate sector is the biggest part of China’s market and has slumped amid massive developer defaults and sliding home sales.
