The Beijing-based company attributed the missed payment to an unexpected cash crunch
Modern Land had previously planned to buy back some of the $250 million dollar bond—which carried a 12.85% coupon—and push out the maturity date on the rest. It scrapped that plan last week, saying it continued to experience liquidity problems and had decided the move wouldn’t be in the best interests of the company or other stakeholders, including bond investors.
More Chinese developers are likely to default and restructure their debts, said Daniel Anderson, managing partner of law firm Ropes & Gray LLP’s Hong Kong office. Modern Land was founded in 2000 and listed in Hong Kong in 2013. It has carved a niche for itself by focusing on green technology and says its dwellings consume only one-third of the energy used by normal residential buildings. In 2016, it became the first Chinese property developer to sell an international green bond.Chairman Zhang Lei is its majority shareholder, with a stake of about 66% as of end-December, according to the company’s annual report. Earlier this month, Modern Land said Mr.
The company’s 11.95% bonds due 2024 were quoted at 25 cents on the dollar as of Thursday, according to the most recent prices available on Tradeweb.
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