Chinese real estate crisis deepens as another developer misses payment deadline

A Chinese developer of luxury apartments, Fantasia Holdings Group, has failed to repay $205 million to bondholders on the heels of the debt crisis that has hit real estate giant Evergrande.

The dollar bond payment due October 4 was not paid, the Shenzhen-based property developer said in a statement to the Hong Kong stock exchange. Earlier, Fantasia said it had “sufficient working capital and no liquidity issue.”

Separately, property management company Country Garden Services Holdings said a unit of Fantasia failed to repay a $108 million loan that also came due on Monday, warning of probable default.

The firm had to halt trading of its shares on September 9 until further notice, and hasn’t resumed since. The group was downgraded by rating agencies over risks stemming from the company’s strained cash flow. Fantasia shares have dropped around 60% year-to-date. Its dollar-denominated bonds slid more than 5 cents to new record lows after the latest news.

According to Fitch estimates, Fantasia has some $2 billion of international bond payments to make between now and the end of next year as well as almost $1 billion of local bond payments.

With a modest market value of $415 million, Fantasia is much smaller compared to the distressed property giant China Evergrande. However, its failure to repay a maturing bond is seen as a distinct sign of a growing crisis in China’s property market.

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