Prestigious University’s Chipmaking Progeny Fails to Buy Back 1 Billion Yuan Bond
What’s new: State-owned chipmaker Tsinghua Unigroup Co. Ltd. said last week that it would not buy back a perpetual bond that was scheduled to be bought back or see its coupon rate adjusted on Friday.
The 1 billion yuan ($149 million) bond, which started to generate yields on Oct. 30, 2015, comes with a coupon rate of 6.5% and is subject to a coupon rate adjustment every five years if the issuer doesn’t buy back the bond.
Caixin has learned from knowledgeable sources that Unigroup said a month ago that it would buy back the perpetual bond on Friday.
What’s the background: Unigroup is controlled by Tsinghua Holdings Co. Ltd., a business arm of Beijing’s prestigious Tsinghua University.
At the end of June, Unigroup had 296.6 billion yuan in total assets and 156.7 billion yuan in interest-bearing debt, of which about 81.4 billion yuan would be due within a year, according to its interim report (link in Chinese).
Unigroup has seen its yuan and dollar bond prices plummet over the past few months, reflecting investor concerns over the company’s ability to meet its bond obligations.
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