Henan Province, a hundred billion large state-owned coal enterprises Yong Coal Group another bond default risk, this is the fifth one in the year.
On the evening of December 10, Yong Coal Group announced that the third short-term financing bond “19 Yong Coal CP003” in 2019 should be redeemed on December 18 to pay principal and interest, but due to the lack of liquidity of the company, there is uncertainty of payment.
“19 Yong Coal CP003” was issued on December 16, 2019, with a total issue amount of 1 billion yuan, a maturity of 366 days, a coupon rate of 4.7%, a total principal and interest amount of 1.047 billion yuan, and a single principal and interest repayment mode. The lead underwriter is CITIC Bank and the co-lead underwriter is Dongfang Securities.
Previously, Yong Coal Group had three bonds “20 Yong Coal SCP003”, “20 Yong Coal SCP004” and “20 Yong Coal SCP007” involved in material default, with the total amount of 3 billion yuan.
Three days ago, on December 7, Yong Coal Group also issued an announcement that the fifth ultra-short-term financing bond of 2020, “20 Yong Coal SCP005”, should be paid on December 15, but due to the lack of liquidity of the company, there is uncertainty of payment.
If “20 Yong Coal SCP005” and “19 Yong Coal CP003” cannot be paid on time, they will become the fourth and fifth bonds defaulted by Yong Coal Group this year respectively, and the accumulated default amount will increase to more than 5 billion yuan.
In addition to the above two bonds, “20Yong Coal SCP006” will also mature in December, with an issue amount of 1 billion yuan.
In 2021, the size of the bonds that Yong Coal Group needs to pay off and face the option of resale exceeds 10 billion yuan.
Yong Coal Group is a large state-owned coal enterprise in Henan Province, one of the top 500 enterprises in China, with total assets of 172.65 billion yuan and main businesses in coal, railroad, chemical and mining industries. The controlling shareholder is Henan Energy and Chemical Group (hereinafter referred to as Henan Energy and Chemical Group), which is the largest state-owned enterprise in Henan Province, and the actual controller is Henan Provincial State-owned Assets Supervision and Administration Commission.
The latter is the largest state-owned enterprise in Henan Province, and the actual controller is Henan Provincial State-owned Assets Supervision and Administration Commission. After Yong Coal Group’s bond default fiasco on Nov. 10, credit rating agencies quickly downgraded its main rating to BB.
On Dec. 7, the credit rating agency downgraded its main credit rating from BB to B again.
On December 9, Yu Neng Hua Group issued an announcement that Yong Coal Group was investigated by the China Securities Regulatory Commission (CSRC) for filing a case, saying that Yong Coal Group had received a notice of investigation from CSRC on December 3 for alleged information disclosure irregularities and was investigated for filing a case.
The debt default of Yong Coal shocked the financial circle, and brought out a large-scale chain reaction. Subsequently, many state-owned enterprises in Henan Province are facing difficulties in issuing debts and capital chain tension.
Wind data shows that since the first default of Yong Coal Group on November 10, as of December 9, four local SOEs in Henan Province have been forced to cancel the issuance of bonds, and there has been no news of successful issuance of bonds by local SOEs.
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