EnergyWatch

China Energy misses payment on bond, triggering cross default

A Chinese oil and gas producer defaulted on a million dollar bond and plans to suspend this year's interest payments on bonds due in 2021 and 2022, while it considers asset sales and seeks to restructure the notes.

Photo: Ellevio

China Energy Reserve & Chemicals Group Co. said it hasn’t paid a USD 350 million bond that matured earlier this month, in the latest example of China’s deleveraging campaign choking off financing for some companies.

The oil and gas producer, which has $1.8 billion of offshore notes outstanding, cited “tightening in credit conditions” for the default. The company plans to suspend this year’s interest payments on bonds due in 2021 and 2022 while it considers asset sales and seeks to restructure the notes, China Energy said in a filing that appeared on the Hong Kong exchange on May 27.

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