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Markets & Stocks
GITIC defaults on debt
October 27, 1998: 8:13 a.m. ET

Chinese provincial investment trust fails to make payment on $200M bon
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NEW YORK (CNNfn) - Faltering Chinese state investment firm Guangdong International Trust and Investment Corp. (GITIC) has defaulted on its corporate debt payments, Hong Kong bankers said Tuesday.
     A $8.75 million semi-annual coupon payment on GITIC's $200 million 20-year bond issue had been scheduled for the close of Monday business in New York. However, no payment had been received, the bankers said.
     On Oct. 6, the People's Bank of China had closed the investment trust -- a financial arm of the Chinese province of Guangdong -- because of perceptions that the firm no longer was able to maintain its estimated $1.38 billion debt.
     The Monday coupon was the firm's first scheduled debt obligation since the closure.
     Although GITIC's debt theoretically is backed by the provincial government, it is more likely that the Bank of China will take over the firm's outstanding obligations.
     The Chinese central bank has asked investors to report their exposure to GITIC. Until the reporting period ends Jan. 6, the firm's accounts have been frozen and no debts will be paid.
     The primary domestic trading partner with neighboring Hong Kong, Guangdong has been more vulnerable to Hong Kong's recent financial tumult than any other mainland region of China.
     GITIC reportedly suffered massive losses from the collapse of the speculative Hong Kong real estate market, causing its now-dissolved GITIC Enterprises unit, one of the first "red chip" or mainland Chinese stocks listed on the Hong Kong Stock Exchange, to enter liquidation earlier this month.
     Credit rating agency Standard & Poor's lowered its rating of GITIC Enterprises debt to CCC+ or "vulnerable to nonpayment" from BB last week.
     On Oct. 13, the agency had rated GITIC itself CC, or "highly vulnerable to nonpayment," the lowest rating above bankruptcy. Back to top
     -- from staff and wire reports

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.