Fears from Suntech bond default spread to other Chinese PV manufacturers

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The Suntech Power Holdings saga has quickly led to questions being asked of the financial health of other leading China-based PV manufacturers.

According to a report from Bloomberg, JA Solar’s COO, Xie Jian was at pains to point out that a convertible note, put at approximately US$120 million, due on 15 May 2013, would be honoured, claiming that funds had already been allocated and that the company was not at risk of default.

But Xie told Bloomberg that he thought financing to the sector could get increasingly more difficult and more expensive as a result of the fallout from Suntech’s difficulties.

He said he thought Chinese banks would be “very nervous” of the possible risk associated with the sector.

PV-Tech understands separately from well-placed industry sources that there is growing concern within the financial community as to the security of lines of credit offered to Chinese suppliers due to the increasingly tight capital markets for the sector.

A number of tier 1 suppliers have been in receipt of billions of dollars of credit in recent years, notably from the China Development Bank.

But other companies are continuing to report successfully securing credit for future operations.

ReneSola, which recently revealed it was sold out of modules to the middle of the year, announced today that it had secured a 15-year loan agreement with China Development Bank of approximately US$50.9 million.

Xianshou Li, ReneSola's chief executive, said the funds would be used to “support our operations in China”.

“Our ability to secure additional capital amid weak macro conditions and a tight credit environment speaks to our healthy overall financial position, as well as to the ability of our management team,” he added.

Suntech has been thrown into turmoil after it defaulted on repayment of US$541 billion bond, forcing its subsidiary Suntech Wuxi into bankruptcy proceedings.

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