China Evergrande has missed yet another set of interest payments on bonds, leading to increased fears that a number of other property developers could face default on their payments.
The Chinese property developer was due to make US$148mln of interest payments on dollar-denominated bonds on Tuesday, but bondholders said they had not been paid.
Evergrande's difficulties in paying interest on part of its US$300bn-plus of liabilities and its trouble selling off assets to help with this deleveraging has spooked local and global financial markets and there are concerns of a domino effect.
Last week, Evergrande’s smaller rival Fantasia Holdings defaulted on a US$206mln bond.
Small developer Modern Land has requested a delay in repayments due later this month, while Sinic Holdings said it was likely to default on its payment next week.
A total of US$92.3bn bonds issued by Chinese developers will be due in the next year, Reuters reported, citing Refinitiv data.
"We see more defaults ahead if the liquidity problem does not improve markedly," said brokerage CGS-CIMB in a note.
“The problems in the Chinese property sector are now impacting upon investors’ general view of systematic risk,” Charles MacGregor, head of Asia at Lucror Analytics, told the Financial Times, adding that Chinese high-yield bonds were “under extreme pressure given a dearth of buyers”.
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