Chinese developer Modern Land has become the latest company to miss a bond payment, indicating the country's property market remains in disarray.
The Beijing-based developer, listed on the Hong Kong Stock Exchange, said in a statement on Tuesday it had failed to redeem a $250 million bond that expired on October 25.
Modern Land blamed the missed payment on an unexpected cash crunch arising from a number of factors "including the macroeconomic environment, the real estate environment and the COVID-19 pandemic".
Earlier in October, the company had asked bondholders to extend the Monday deadline by another three months, but cancelled the offer last week.
Modern Land, which builds energy-efficient homes, said it was working with legal adviser Sidley Austin and planned to engage independent financial advisers soon to develop a plan for onshore and offshore stakeholders.
According to Bloomberg, citing China's Cailian Press, Modern Land has tried to sell assets , get loans and add strategic investors before skipping a payment . Research firms, including OANDA and Lucror Analytics, described the event as a "default", although the company did not specify whether the incident was a default event.
Ongoing concerns about China's real estate sector seemed to put pressure on Asian stocks on Tuesday. The Shanghai Composite index fell 0.3 per cent and Hong Kong's Hang Seng fell 0.4 per cent.
The Hang Seng Mainland Property Index fell 5 per cent and the Hang Seng Property Index fell 1.9 per cent.
According to https://exness1.org/, shares in Modern Land, which has been out of trading since 21 October, have fallen 55% already this year.
Several developers have defaulted this month, although last week Evergrande made one payment on $83.5 million worth of offshore bonds ahead of schedule.
Evergrande, which is at the centre of a property storm in China, has another grace period payment due on 29 October and analysts say investors will be watching closely to see if it makes that payment. It has several million dollars to pay in the coming weeks.
Fantasia and Sinic , two other small Chinese developers, have also defaulted on their debts. According to Bloomberg, Chinese borrowers as a whole have defaulted on at least $8.7 billion in offshore bonds this year.