- The semiconductor conglomerate has been a major driving force in Beijing’s campaign to boost its chip industry amid an ongoing tussle over trade and technology with the US
- Even before the default, Tsinghua Unigroup’s bond prices had already plunged after the company said it would not exercise its option to redeem a perpetual bond
As per a report by Reuters, three sources said that Tsinghua Unigroup, a major government-backed player in China’s technology race, has defaulted on a 1.3-billion-yuan ($197.96 million) bond. It added that the default by Tsinghua Unigroup, a wholly-owned division of the Tsinghua University in Beijing, caused a credit rating downgrade that is expected to weaken the company’s financial health.
Tsinghua Unigroup’s credit rating was slashed to BBB from AA on Monday by China Chengxin International Credit Rating Co. The company could not be immediately reached for comment.
Redeem a perpetual bond
As per the report, the semiconductor conglomerate has been a major driving force in Beijing’s campaign to boost its chip industry amid an ongoing tussle over trade and technology with the US. Sources said that Tsinghua Unigroup defaulted after its proposal to extend a repayment deadline failed to gain support from bondholders.
It added that Tsinghua Unigroup’s default follows other state borrowers like coal miner Yongcheng Coal & Electricity Holding Group and automaker Huachen Automotive Group, which have failed to service debts on time. The report said that even before the default, Tsinghua Unigroup’s bond prices had already plunged after the company said it would not exercise its option to redeem a perpetual bond.
