A Chinese property developer backed by the country’s largest insurance group has defaulted on a $530 million bond in the latest test for the country’s debt-laden real estate sector and the international investors backing it, reported the Financial Times.
The failure of China Fortune Land Development to repay the bond, investors in which include BlackRock and HSBC, comes against a backdrop of mounting pressure from Beijing on China’s biggest developers to reduce their debts. It follows a spate of corporate defaults late last year that sent shockwaves through the country’s $15 trillion onshore bond market, said the FT.
In a statement to the Singapore stock exchange on Friday, the industrial park developer said the repayment, which was due on Sunday, would be delayed. It said it “intends to honor its debt obligations but needs time to address its short-term liquidity issues”.
China Fortune Land is 25% owned by Ping An, China’s biggest insurance company, and has dollar-denominated debt totaling $4.6 billion, according to data compiled by Bloomberg. In early February, it said it had missed payments of more than RMB 5.3 billion ($820 million) on onshore loans.