news, comment, analysis and data on the global business of credit trading and investing
Funds
Asia sees two defaults as issuers refuse to pay lenders
China Medical Technologies was yesterday downgraded by Fitch after missing a coupon payment, while Indonesian shipping company Berlian Laju Tanker declared its intention to halt debt repayments today, in relatively rare examples of defaults by Asian corporates.
Fitch downgraded China Medical Technologies yesterday from B+ to RD after the company failed to pay the coupon on its $125 million notes due 2016. The coupon was originally due 15 December 2011, with a 31 day grace period which has now expired. The company stated in December 2011 that it was restructuring its debt, but this was seen as opportunistic at the time because it claimed to hold $206 million in cash in September 2011.
Meanhile, Indonesia-based shipping company Berlian Laju Tanker announced a "debt standstill" today, whereby it will temporarily cease payments on all loans, bonds and debts including its $400 million unsecured notes due 2014.
<< END >>
Related stories
- Oak Hill Advisors confirms senior hire to its London office 4 hours ago
- New York hedge fund manager raises $112 million for credit fund 5 hours ago
- Muni CDS market moves closer to corporate standards 2 months ago
- Investors get mauled after buying new Spanish corporate bond 3 months ago
- Canwest files for creditor protection after long battle 2 years ago
Trading
Structured
CFlux secondary
CLO index levels:
| Index | 14 May |
|
| CFlux USD AAA | ↑ | 96.0 |
| CFlux USD AA | ↑ |
87.7 |
| CFlux USD A | ↑ | 85.1 |
| CFlux USD BBB | ↓ | 77.2 |
| CFlux USD BB | ↑ |
75.9 |
| CFlux USD EQ | ↓ | 76.7 |
From what I can find, the Chinese government owns 60% of China Medical Technologies. Thus, this government has chosen to default on the debt that the company could pay if it wished. It will be instructive to see how creditors claims are honored relative to equity.