Another Chinese property developer defaults, shares drop (updated)

Modern Land (China)

26/10/2021 05:58

(Recasts, adds detail and investor comment)
    By Donny Kwok and Andrew Galbraith
    HONG KONG/SHANGHAI, Oct 26 (Reuters) - Modern Land  1107.HK 
reported a missed payment on Tuesday, the latest Chinese
property developer to do so, adding to worries about spiralling
effects of the debt crisis at behemoth China Evergrande Group
 3333.HK  and dragging on shares in the sector.
    China's state planner is set to meet with property firms
carrying large dollar-denominated debts later in the day to take
stock of their total issuance volume and repayment capability,
amid the mounting concerns about liquidity. 
    Evergrande, which narrowly averted a costly default https://www.reuters.com/world/china/china-evergrande-sends-funds-trustee-bond-coupon-due-sept-23-source-2021-10-22
 last week, is reeling under more than $300 million in
liabilities and has a major payment deadline on Friday.
 urn:newsml:reuters.com:*:nL1N2RL01Y
    Modern Land (China) Co Ltd said in a filing that it had not
repaid principal and interest on its 12.85% senior notes that
matured on Monday due to "unexpected liquidity issues".
    This follows a default by Fantasia Holdings Group  1777.HK 
on a maturing dollar bond in early October that heightened
concerns in international debt markets, already roiled by
worries over whether Evergrande would meet its obligations.
    Developers are defaulting "one by one", said an investor
with exposure to Chinese high-yield debt, who asked not to be
named as he was not authorised to speak with media.
    "The question is always, who's next?" 
    Shares of Chinese property shares extended losses, hurt also
by concerns over plans to introduce a real estate tax https://www.reuters.com/business/finance/china-says-will-roll-out-property-tax-pilot-scheme-some-regions-xinhua-2021-10-23.
 China's CSI 300 Real Estate Index  .CSI000952  fell 2.6%, and
the Hang Seng Mainland Properties Index  .HSMPI  slumped nearly
5%.
    The prospect of contagion and more defaults have weighed on
the sector in a major setback for investors. 
    Chinese Estates Holdings Ltd  0127.HK  said it would book a
loss of HK$288.37 million in the current financial year from its
latest sale of bonds issued by Chinese property developer Kaisa
Group Holdings Ltd  1638.HK .  urn:newsml:reuters.com:*:nL1N2RM014
    Shares in China Evergrande Group's electric vehicle (EV)
unit  0708.HK  rose as much as 5.8% early on Tuesday, as the
cash-strapped developer said it would prioritise the growth of
its EV business, before reversing course to slump 3%. 
    China Evergrande  3333.HK  gave up early gains to fall 6%.

 (Reporting By Donny Kwok in Hong Kong and Andrew Galbraith in
Shanghai; Writing by Anne Marie Roantree; Editing by Himani
Sarkar)
 ((annemarie.roantree@thomsonreuters.com; +852 97387151; Reuters
Messaging: annemarie.roantree.thomsonreuters.com@reuters.net))