[Contagion] Scenery Journey, an Evergrande subsidiary, has failed to make payments of ~$82M. Adding another developer in trouble: Sino Ocean Group.

(Bloomberg) — Investor concerns over China Evergrande Group’s debt are shifting to the country’s stronger property companies as a selloff across the industry’s dollar bonds hits higher-quality borrowers.

The fear of contagion comes as holders of dollar notes sold by Evergrande unit Scenery Journey Ltd. are yet to receive payment for coupons that were officially due Saturday. The unit had two dollar bond coupons due Nov. 6: $41.9 million on a 13% note and $40.6 million on a 13.75% bond.

China investment-grade dollar notes weakened further on Monday and some Chinese real-estate developers’ debt fell as investors eyed possible contagion from the property industry. Market participants were also on high alert to the risk of more policy change as the Communist Party kicks off a major convention this week.

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An Evergrande unit’s 13% dollar note due 2022 that had a coupon due Saturday was indicated at 22.5 after rising 4.7 cents over the previous two weeks.



h/t laflammaster


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