Chinese developer misses payment, adding to industry strain
Oct 5, 2021
A mid-size Chinese real estate developer has failed to make a $205.7 million bond payment, adding to financial strain in the industry as a bigger rival tries to avoid defaulting on billions of dollars of debt
BEIJING (AP) — A mid-size Chinese real estate developer failed to make a $205.7 million payment due to bondholders Tuesday, adding to the industry's financial strain as one of China's biggest developers tries to avoid defaulting on billions of dollars of debt.
Fantasia Holdings Group announced it missed the payment in a statement issued through the Hong Kong Stock Exchange. It gave no explanation but said it had asked for trading of Fantasia shares to be suspended.
Some Chinese developers are struggling to repay debt after regulators tightened limits last year on their use of borrowed money. That is fueling fears about possible defaults and turmoil in financial markets.
Investors are worried Evergrande Group might collapse with 2 trillion yuan ($310 billion) of debt. The company has missed at least one payment to bondholders abroad but has yet to be declared in default.
Economists say Beijing can prevent a broader credit crunch if Evergrande defaults but wants to avoid bailing out the company or its creditors as a warning to other borrowers and lenders to be more disciplined.
Fantasia, valued by the stock market at $415 million, reported a 153 million yuan ($24 million) profit for the first half of 2021 and said revenue rose 18.5% over a year earlier to 10.9 billion yuan ($1.7 billion).
Hundreds of smaller Chinese developers have gone bankrupt since regulators began tightening control over the industry's financing in 2017 amid concern about rising debt and the possible risk of a financial crisis.
In March, another developer, Fortune Land Development Co. said it missed interest and debt payments totaling 5.3 billion yuan ($813.5 million).
More News
M.L.B. Playoff Ads With Sydney Sweeney and Megan Fox Draw Backlash
Commercials with Sydney Sweeney promoting a gambling platform and Megan Fox endorsing male enhancement have rankled fans, and even athletes. Who is in charge?
Netflix Hurries to Rewrite Its Narrative With Layoffs and a Sudden Firing
Despite strong revenues and profits, the streaming service cut 1,000 jobs and jettisoned its chief content officer. Drops in the stock price and viewer engagement are to blame.
Why Bad News in the Bond Market May Be Good News for Investors
In the contrarian logic of investing, rising interest rates have made bonds much more attractive, our columnist says.
U.S. Budget Deficit Nears $2 Trillion, a Reality Check for Trump’s Cost Cutting
Higher interest rates are inflating borrowing costs as the Trump administration spends on the Iran war and tariff refunds.
Indonesian Stocks Plunge as MSCI Threatens to Drop Market from Indexes
The potential downgrade by MSCI, an influential index provider, adds to a deepening crisis of investor confidence in the economic policies of President Prabowo Subianto.
Warsh Vows to Tame Inflation as A.I. Delivers ‘Shock’ to Economy
The Federal Reserve chairman stuck to his pledge to avoid providing guidance about the path forward for interest rates, but did nothing to convey an urgency to raise them later this month.
A new railway corridor: How Nanning links Chinese and ASEAN markets
A new railway corridor: How Nanning links Chinese and ASEAN markets
Watch: Did Tesla really just unveil a flying car?
Tesla CEO Elon Musk showcased the vehicle at a facility owned by his SpaceX company, which helped develop the model.
China and Europe are building new connections in aerospace
China and Europe are building new connections in aerospace – from skies to stars. On the one hand, their deep industrial partnership is scaling global civil aviation to new heights. On the other hand, scientific collaboration is opening new possibilities for space exploration and deepening our understanding of the Sun-Earth system.
BizTalk | Exclusive interview with Former PM of Bosnia and Herzegovina
In this episode of BizTalk, CGTN's Guan Xin speaks with Zlatko Lagumdzija, former prime minister of Bosnia and Herzegovina, about China's development and its role in global governance.
When Will the Fed Move on Rates?
Kevin Warsh, the central bank’s chairman, suggested he wouldn’t push to raise borrowing rates this month. But persistent inflation may force the Fed’s hand.
Banks expect to be hit with higher taxes in Budget
Senior banking executives have told the BBC they expect to be "on the menu" in the chancellor's Budget tax later this month.