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May 12 (Reuters) – Gold gained on Thursday as the dollar and Treasury yields slipped after U.S. consumer price data suggested inflation might have peaked in April, allaying some concerns of more aggressive Fed rate hikes.

A weaker dollar makes gold attractive for overseas buyers, while lower Treasury yields reduce the opportunity cost of holding zero-yield bullion.

FUNDAMENTALS

* Spot gold XAU= was up 0.2% at $1,855.11 per ounce, as of 0103 GMT, having risen as much as 1.1% in the previous session. U.S. gold futures GCv1 rose 0.2% to $1,856.90.

* The dollar =USD fell, lifting demand for greenback-priced gold, after economic data showed inflation remained high but was unlikely to lead the U.S. central bank to shift to a more aggressive path of monetary policy. USD/

* The consumer price index (CPI) rose 0.3% last month, the smallest gain since August, the Labor Department said on Wednesday, versus the 1.2% month-to-month surge in the CPI in March, the largest advance since September 2005.nL2N2X315F

* Benchmark U.S. 10-year Treasury yields were down after the data failed to ease concerns that the Federal Reserve’s agenda to cool rising prices may induce a recession. US/

* The Fed raised its benchmark overnight interest rate by half a percentage point last week, the biggest hike in 22 years, as it moves to unwind ultra-easy pandemic-era monetary policy and attempts to combat soaring inflation.

* Spot silver XAG= was up 0.1% to $21.57 per ounce, while platinum XPT= dipped 0.2% to $990.64, and palladium XPD= fell 0.7% to $2,021.16.

DATA/EVENTS (GMT)

0600 UK GDP Est 3M/3M March

0600 UK GDP Estimate MM, YY March

0600 UK Manufacturing Output MM March

0600 UK GDP Prelim QQ, YY Q1

(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Vinay Dwivedi)

((BharatGovind.Gautam@thomsonreuters.com; +91-80-6182-3021/ 3590 (If within U.S. call 651-848-5832 );))

Adds source and company comment, bond prices, details

By Scott Murdoch and Clare Jim

HONG KONG, May 12 (Reuters) – Developer Sunac China 1918.HK missed the deadline for coupon payments on a $742 million offshore bond and said on Thursday it doesn’t expect to make payments coming due on other bonds, adding to a wave of defaults in China’s debt-laden property sector.

A source close to the company, the nation’s third-largest property developer by sales, said Sunac is considering a restructuring of its offshore debt to extend payments. It is also talking to state-owned entities about strategic investments in the firm.

Sunac declined to comment.

The company said in a filing to the Hong Kong stock exchange that it has hired Houlihan Lokey as a financial advisor and Sidley Austin as a legal adviser to explore solutions to ease current liquidity constraints.

With $7.7 billion in dollar bonds, Sunac is the fourth-largest issuer among Chinese developers, according to data from Duration Finance.

China’s property sector has been hit by series of defaults on offshore debt obligations, highlighted by China Evergrande Group 3333.HK and Kaisa Group 1638.HK, as well as bond exchanges, with Zhongliang Holdings 2772.HK the latest firm to extend payments.

Sunac’s debt payment problem reflects a higher likelihood that some other major developers could miss their upcoming obligations or may need to do bond exchanges, analysts and developers said. nL2N2X30QW

The debt crisis has spilled over into the country’s vast property market, with new home sales and construction slumping as financing gets tougher and potential home buyers shy away, fearing some projects may be stalled.

“The group’s contracted sales have continued to decline significantly, while access to new financing has become increasingly difficult with more liquidity issues occurring among certain property developers,” Sunac said in the filing.

In a separate press statement, Sunac said its aggregated sales in March and April fell 65% from a year ago due to COVID-19 outbreaks in various cities, and its refinancing and asset disposal plans did not materialize after a series of rating downgrades earlier this year.

The firm confirmed it missed the Wednesday deadline for a $29.5 million interest payment on the October 2023 bond VG198108928= that was required to be repaid last month, and it does not expect it will pay three other coupons due last month totalling $75.3 million before the 30-day grace periods expire, or pay other senior notes when they become due.

Sunac said missing the October 2023 payment meant bondholders could seek the immediate repayment of the principal and interest but it had not received any “acceleration notices” from those holders.

It apologised to its creditors in the filing and asked them to give it the time “to overcome challenges” while it makes efforts to enhance credit profile, including accelerating sales, disposing of assets, seeking debt extension, and introducing strategic investors.

The October 2023 bond was traded at 21.156 cents on the dollar as of 0301 GMT, edging up from 19.107 on Wednesday, while another bond due June 2022 VG201295483= traded at 28.015.

Sunac’s Hong Kong-listed shares have been suspended since April 1 pending the release of its 2021 financial statements. Its unit Sunac Services 1516.HK fell over 7% on Thursday.

(Reporting by Scott Murdoch in Hong Kong; Editing by Christian Schmollinger and Richard Pullin)

((Scott.Murdoch@thomsonreuters.com;))

HONG KONG, May 12 (Reuters) – Sunac China 1918.HK did not make an interest payment on a $750 million offshore bond by the time a grace period expired, the company said in a statement on Thursday.

It had been due to pay $29.5 million in interest on the October 2023 bond that was required to be repaid last month.

 

(Reporting by Scott Murdoch; Editing by Tom Hogue)