Another major Chinese developer has defaulted on its debt, dealing a new blow to the ailing real estate sector in the world’s second largest economy.
Shanghai-based Shimao Group failed to pay the interest and principal on a $1 billion bond due Sunday, according to a company filing to the Hong Kong stock exchange. The bond had no grace period for the principal, according to its offering document.
It is the first missed debt repayment on a dollar bond by Shimao, which had been grappling with mounting financial stress for months.
China’s real estate sector has been lurching from one crisis to another since 2020, when Beijing started cracking down on excessive borrowing by developers in a bid to rein in their high debt and curb runaway housing prices.