China developer Modern Land fails to repay $250-million bond

A Chinese developer of real estate projects that use green technologies has become the latest builder to default, adding to the record for offshore bonds from the nation’s borrowers.

Modern Land China Co, which is based in Beijing and builds energy-saving homes throughout the nation, didn’t repay either the principal or interest on a $250 million bond due Monday, according to a filing Tuesday morning. The company is working with its legal counsel Sidley Austin and expects to engage independent financial advisers soon, the filing said. 

Fitch Ratings downgraded Modern Land to restricted default from C late Tuesday following the payment miss. The developer tried divestit­ures, borrowing and adding strategic investors before not making the payment, reported Chinese financial platform Cailian. 

Chinese borrowers have defaulted on about $9 billion of offshore bonds this year, with the real estate industry accounting for one-third of that amount. Multiple developers have defaulted this month, though Evergrande made a coupon payment last week before a grace period expired. Still, Evergrande’s creditors are bracing for an eventual debt restructuring that could rank among the largest ever in China. 

China urges Evergrande’s founder to pay debt with own wealth

Chinese authorities told billionaire Hui Ka Yan to use his personal wealth to alleviate Evergrande Group’s deepening debt crisis, according to people familiar with the matter. Beijing’s directive to the Evergrande founder came after his company missed an initial September 23 deadline for a coupon payment on a dollar bond, said the people, asking not to be identified discussing a private matter.