XXI Century fails to pay USD 20 mln of Eurobonds

Principal Real estate developer XXI Century failed yesterday to delay the first amortizing USD 20 mln principal payment on its USD 222.1 mln (together with capitalized interest) bonds, scheduled for today, November 24th. At the bondholders meeting in London on Tuesday, holders of only 53% of debt were present, below the minimum 75% required quorum. Hence, no legitimate decision regarding the payment delay was made. The next bondholders meeting are scheduled for December 8th, 2010. As the company is now in a quite distressed situation and can find no source of fresh equity (neither from present or new investors), we believe it will be difficult for investors to avoid some haircuts and/or partial conversion into equity and/or some other kind of restructuring, rather than simple maturity prolongation with a coupon rate increase. The bonds are now traded at close to 10% of par.