Chinese developer Modern Land is the most recent company from the troubled property sector to miss a payment on a dollar bond, reports the Financial Times. Modern Land’s difficulties are a sign of ongoing turmoil in the country’s struggling property sector despite China Evergrande, the most indebted developer, narrowly avoiding a default last week.
Modern Land said that principal and interest payments on a bond worth $250 million were “not met” by a Monday deadline. Earlier this month the company had asked for a three-month extension to the maturity on the bond, a proposal it later withdrew, saying its liquidity issues had not been resolved.
The company blamed the missed payment on “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.”
Investors have been alert to potential bond defaults in the sector, with Evergrande making a last-minute payment on an offshore bond last week. China’s property sector, which has been a crucial engine for growth and rising living standards, has also been hit by signals from Beijing in recent months that the government would prioritize reducing debt over economic growth.