* Sinosteel says delays payment of interest due Tuesday
* Company extended date for redeeming its bonds by one month
* Several Chinese firms have defaulted so far this year (Adds credit downgrade by Chinese rating agency)
SHANGHAI, Oct 20 (Reuters) - China’s Sinosteel will delay the payment of interest to its bondholders due on Tuesday, it said, after the state-owned company extended the date investors can start redeeming its bonds by a month.
The company made the announcement in a statement posted on the website of one of the country’s main bond clearing houses.
On Monday, the steel trader extended a put option date for investors by a month, amid reports the debt-laden firm had asked investors to hold off seeking redemptions due to liquidity problems.
Sinosteel offered shares of its Shenzhen-listed subsidiary Sinosteel Engineering & Technology Co Ltd as additional collateral for the debt, as an inducement for bondholders to stay invested, it said on Monday.
The company said the delay in the interest payment was to give investors more time to review the new collateral plan.
“The new collateral plan under discussion might affect investors’ willingness to redeem bonds and interest payment, so we will delay paying the interest,” the company said.
It did not say when it would make the interest payment.
China Chengxin International Credit Rating, one of the country’s three rating firms, said it had downgraded Sinosteel’s credit rating sharply to a CC rating from BB because of the situation surrounding the company and the broader economy.
Several Chinese firms have defaulted this year following last year’s first-ever default in the domestic bond market by Chaori Solar. These include state-owned Baoding Tianwei, a power equipment firm, and Cloud Tech Live, a food producer which tried to reinvent itself as an Internet company.
But no firm has yet publicly defaulted on a so-called enterprise bond - directly approved by the state economic planning agency and typically issued by large, centrally administered state-owned companies.
Sinosteel has struggled with falling revenue in recent years, hit by a slowing economy and a steel supply glut, while a crackdown on cheap credit in recent months has compounded difficulties in China’s metals trading sector. (Reporting by Ruby Lian, Samuel Shen, Brenda Goh and Kazunori Takada; Editing by Edmund Klamann)