China Suffers Biggest Dollar Bond Default By State-Owned Company in Two Decades
- Tewoo Group’s investors take losses on $1.25 billion of bonds
- Firm sets precedent for debt restructuring cases in the future
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A major Chinese commodities trader became the biggest dollar bond defaulter among the nation’s state-owned companies in two decades, in a moment of reckoning for Beijing as it struggles to contain credit risk in a weakening economy.
Tewoo Group Corp. announced results of its unprecedented debt restructuring, which saw a majority of its investors accepting heavy losses. This is expected to reshape investors’ perceptions about government-owned borrowers whose identity has for years offered a relatively strong sense of security.