TWO Chinese companies failed to repay bonds worth US$526 million earlier this week, as the country’s economy slows.

Peking University Founder Group was unable to secure sufficient funding to repay a 270-day, 2 billion yuan (US$285 million) bond, according to a company filing to the National Interbank Funding Center.

Tunghsu Optoelectronic Technology Co. failed to deliver repayment on both interest and principal on a 1.7 billion yuan bond, according to Shanghai Clearing House.

Last week, industrial firm Xiwang Group failed to pay a 1 billion yuan bond, missing a fresh repayment deadline on an already defaulted bond.

“It’s getting harder for companies to get funding help when facing a debt crisis, unless they’re centrally-controlled companies and local State-owned firms that have great importance to the local economy,” said Yang Hao, fixed income analyst from Nanjing Securities Co.

Peking University Founder’s missed payment on the bond, which has a 15 business-day grace period, is set to escalate concerns about the weak finances of business arms of Chinese universities. The company and Tsinghua Unigroup Co., a top chipmaker run by Tsinghua University, have been under the spotlight in recent months following a tumble in their dollar bonds.

Founder Group’s debt-asset ratio rose to 82.74 percent as of the end of June from 81.94 percent at the end of last year, with net losses widening to 1.05 billion yuan from 867 million yuan in the same period.

Tunghsu’s five-year paper was originally due December 2021 but investors recently opted to exercise a put option on it. The electronic display panel maker has now missed three onshore bond payments in the past month.

Tunghsu failed early repayment on 1.97 billion yuan in principal and interest on a note on which bondholders similarly exercised a put option. It also was unable to make good on an interest payment on another local bond.

Tunghsu Group’s financial woes are indicative of China’s manufacturing sector, which saw spending only barely above the record low-level hit in September.

It also highlights the payment struggles faced by the nation’s private firms, which are being hit harder by the country’s economic slowdown. (SD-Agencies)