(Bloomberg) -- Chinese developer Yuzhou Group Holdings Co. said it won't pay off two dollar bonds due this week, meaning some events of default will occur, as builders continue to struggle meeting debt payments.
The company earlier this month offered to swap the notes for new debt, and investors exchanged most of their holdings. There's $104.9 million of combined principal remaining, Yuzhou said in a Monday stock exchange filing, and it's opting not to pay that while planning to relaunch the exchange offer this week.
“Certain events of default will occur in respect of” the two dollar bonds, the company said, but that won't be the case for its other such debt. Yuzhou has $5.7 billion of dollar notes outstanding, according to data compiled by Bloomberg.
The company's pending missed payments follow peer DaFa Properties Group Ltd. saying it didn't pay off the remainder of a dollar bond due last week that was part of its own debt swap. Such exchanges have been among the ways Chinese builders have been attempting to avoid defaults, as missed payments in the sector hit a record last year. Questions about their ability to meet debt obligations helped fuel big swings last week in developers' dollar bonds.
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