http://www.bloomberg.com/news/2014-08-18/china-s-first-bond-default-in-focus-as-debtholders-meet.html
Holders of China’s first corporate bond to default onshore met today in Shanghai, as investors look for clues on how the government will balance market liberalization with steps to maintain stability.
There was difficulty assessing the overseas assets of Shanghai Chaori Solar Energy Science & Technology Co. and no specific restructuring plan emerged from the gathering, according to Wang Xuejun, an investor in attendance. The solar-panel maker will issue a statement by tomorrow at the latest, Vice President Liu Tielong said when reached on his mobile phone after the meeting. More than 10 police cars were on the street in front of the company headquarters today around 2:30 p.m. as the gathering took place.
While Premier Li Keqiang said defaults may be unavoidable in some cases after Chaori failed to make a full coupon payment on March 7, the country has averted similar cases since. Widespread bond nonpayments would cause financial market turbulence, which can’t be allowed when the economy faces “relatively heavy” downward pressure, according to a front-page commentary in a central bank publication today.
Chaori only paid 4 million yuan ($650,755) of an 89.8 million yuan coupon due in March on its 2017 bonds, becoming the first company to default on a yuan note onshore. Shanghai marked a milestone in corporate bankruptcy in June when a court accepted a restructuring application for the manufacturer.
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