Origins of Chinese Bond Default Buried in Accounting Footnotes

Investors still wondering how Kaisa Group Holdings Ltd. doubled its debt in six months and triggered China’s first property bond default may want to read page 63 of its 2014 interim report.

There, in footnote No. 15 of the Shenzhen-based company’s balance sheet, is a reference to 11 billion yuan ($1.8 billion) in advance deposits for property projects from third parties and for 1.15 billion yuan that needed to be refunded.