China’s Tsinghua Unigroup flags default on $2 billion notes due in 2021, 2023 and 2028

By Rebecca Melvin

New York, Jan. 29 – Tsinghua UNIC Ltd. said it will be unable to repay the principal on its $1.05 billion 4¾% note when it becomes due on Jan. 31, 2021, according to an announcement by the company published by the Stock Exchange of Hong Kong Ltd. on Friday.

The failure to pay the principal and interest will constitute a cross-default under the bond conditions of its $750 million of notes due Jan. 31, 2023 priced with a 5 3/8% coupon and $200 million of notes due Jan. 31, 2028 with a 6½% coupon. All the tranches are guaranteed by China’s Tsinghua Unigroup Co. Ltd.

The issuer and guarantors are looking into ways to solve their liquidity issue, the company said.

Trading of the bonds on the Stock Exchange of Hong Kong Ltd. has been suspended since Nov. 18.

The company also gave notice that the 2021 bonds will be delisted from the exchange the day after they mature.

The chip maker supplies digital infrastructure and services and is based in Beijing.

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