Debt holders of the Chinese construction company Evergrande said on Tuesday that they had not received interest payments on the three-dollar bonds as China’s corporate debt is trading at its highest prices in a decade.
The world’s most indebted construction company was due to pay interest totaling $ 148 million (€ 128 million) by Tuesday afternoon in Hong Kong.
Investors said they did not receive the money, according to two people familiar with the matter, quoted by the Financial Times.
The last time the bonds were traded at prices ranging from 21 to 22 cents per dollar.
Last month Evergrande missed an important payment $ 83.5 million (€ 72.2 million) interest on the bond due next year.
The disruption triggered a 30-day grace period before the company officially defaulted.
The company has already missed at least five bond interest payments.
Evergrande liquidity crisis raised doubts about the financial condition China’s real estate sector amid declining sales and Beijing’s pressure on developers to cut debt levels.
The high-interest Asian bond market, where Chinese developers are among the largest issuers after decades of rapid urbanization in the country, has been shaken in recent days by panic selling that pushed the market towards higher prices in a decade.
Sinic Holdings, another Chinese real estate developer, said late Monday that it would “probably” default due to “lack of financial resources.”
The bonds are trading at about 25 cents for every dollar.
Fantasia, a construction company founded by the niece of former Chinese vice president Zeng Qinghong, also defaulted on the $ 206 million bond.
Sentiment on Evergrande bonds deteriorated significantly in July after a series of incidents, including the freezing of its Chinese bank deposits and the suspension of the sale of some projects.
New home and land sales in China’s real estate sector account for about a quarter of the country’s economy.
