Modern Land becomes latest Chinese developer to default as Evergrande grabs lifelines

Business & Technology

The Chinese developer Modern Land said today that it had missed all payments on a $250 million bond, highlighting continuing strain in China’s property sector. At the same time, Evergrande appears to have averted multiple crises and the IMF says that risks are “contained,” for now.

A housing complex of troubled real estate developer China Evergrande Group is pictured in Beijing on October 22, 2021. Kyodo via Reuters Connect

A little over a month ago, the latest liquidity crisis at massive Chinese property developer Evergrande Group raised alarm bells worldwide. But then, the highly indebted conglomerate managed to grab several lifelines, including:

At least for the time being, the IMF says that the risks from Evergrande are “contained.” This could, of course, quickly change if a default on a future bond payment — of which Evergrande has many due over the coming months — sets off an unpredictable market panic and contagion.

At the same time, other property developers have had worse luck. Yesterday, Modern Land, a “​​Chinese developer of real estate projects that use green technologies…didn’t repay either the principal or interest on a $250 million bond,” Bloomberg reports.

Modern Land joins a list of troubled companies in the sector, including Evergrande, Sinic, China Properties Group, and Fantasia Holdings.

  • The green developer’s missed payment brings the total amount of defaults among Chinese borrowers this year to about $9 billion, a third of which is in real estate, per Bloomberg.

For context on Evergrande and its place in China’s economy, see on The China Project: The fall of the Evergrande boss; The end of China’s runaway growth.

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