Modern Land China has become the latest developer from Asia's largest economy to miss a dollar bond payment, underscoring the stress spreading across the sector, Nikkei reported.
The company failed to pay interest and principal due on a $250 million bond, according to a filing on Tuesday with the Singapore stock exchange, where the bond is listed.
The repayment was not met, "Owing to unexpected liquidity issues arising from the adverse impact of a number of factors including the macroeconomic environment, the real estate industry environment and the Covid-19 pandemic faced by the group," the statement said, the report added.
Fantasia Holdings, Sinic Holdings and China Properties have already defaulted on offshore bonds this month, while China Evergrande Group narrowly averted a default by making a coupon payment on time last week. Evergrande faces another deadline on Friday. Global ratings agencies have already slashed their score on a record 44 Chinese developers this month as liquidity woes mount amid rising maturities, the report said.
Modern Land last Wednesday abandoned a proposal to extend repayment on the bond and the next morning halted trading of its stock and debt securities pending another announcement. The trade suspension remains in place, it said in the latest statement.
A regulatory crackdown on Chinese developers by authorities -- who are eager to rein in excessive leverage before it sparks a financial crisis -- has closed down funding avenues for developers. Under rules issued last year, companies can enhance borrowings only if their balance sheets meet net gearing, liquidity and other guidelines under the so called "three redlines" rules, the report said.
The clampdown has pushed banks to cut their exposure to the sector, and companies have not tapped the offshore bond market in over a year.
Despite such moves, the missed payments by Evergrande and defaults by smaller rivals have sparked fears of contagion across the $50 trillion Chinese financial system in recent weeks.
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