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.