- Modern Land failed to make a $250 million dollar bond payment that matured on Monday.
- The Chinese developer, which works on green projects, cited unexpected liquidity issues arising from a number of factors.
- Last week, embattled rival Evergrande unexpectedly made an $83.5 million payment to offshore bondholders.
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Chinese developer Modern Land became the latest company to miss a bond payment, indicating that the country's property market remains in turmoil.
The Beijing-based developer, which is listed in Hong Kong, said in a statement on Tuesday that it had failed to repay a $250 million dollar bond that matured 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 industry environment and the COVID-19 pandemic."
The company had asked bondholders earlier in October to extend Monday's deadline by three more months, but terminated the proposal last week.
Modern Land, which builds energy-saving homes, said it is working with legal counsel Sidley Austin and expects to engage independent financial advisors soon to formulate a plan for onshore and offshore stakeholders.
Before missing the payment, Modern Land tried divestitures, borrowing, and adding strategic investors, Bloomberg reported, citing Chinese outlet Cailian Press. Research firms including OANDA and Lucror Analytics called the event a "default," although the company didn't specify whether the incident constitutes an event of default.
Ongoing concerns about the property sector in China appeared to weigh on Asian equities on Tuesday. The Shanghai Composite slid 0.3% and Hong Kong's Hang Seng fell 0.4%.
The Hang Seng Mainland Property index fell as much as 5%, while the Hang Seng Property index fell 1.9%.
Modern Land's shares, which have been halted from trading since October 21, are down 55% already so far this year.
Multiple developers have defaulted this month, although Evergrande made one offshore bond payment worth $83.5 million ahead of deadline last week.
Evergrande, which is at the center of the China property storm, has another grace period payment due on October 29, with analysts saying investors will be closely watching for whether it makes that payment. It faces a number of multi-million dollar payment deadlines in the coming weeks.
Fantasia and Sinic, two other smaller Chinese developers, have also defaulted on their debt. Chinese borrowers overall have defaulted on offshore bonds worth a record of at least $8.7 billion so far this year, according to Bloomberg.