- Glorious Property misses $26.5 million interest on 2018 notes
- Debt for listed builders rose 21% to record 3 trillion yuan
A Shanghai-based developer missed a deadline to pay interest on an international bond, reinforcing concern that builders have been too aggressive in chasing China’s property boom.
Glorious Property Holdings Ltd. didn’t pay $26.5 million of semi-annual interest due Monday on its 13.25 percent notes that mature in 2018. The builder, controlled by tycoon Zhang Zhi Rong, said it will honor the coupon within a 30 day grace period. That’s the second time this year the developer missed a deadline on the notes. It failed to meet a March 4 interest payment before honoring it later that month within a grace period, according to the data.
“Our management is arranging funds for the coupon payment and we do wish to settle the coupon as soon as possible,” the builder said in an e-mailed reply to questions Tuesday.
The development highlights risks for investors even as China’s property sector rebounds. The real estate industry, which accounts for about one third of the nation’s economic output, has been taking advantage of easier access to borrowing as the government seeks to sustain flagging growth. Total debt for 197 listed builders in the country rose 21 percent to a record high of 3 trillion yuan ($449 billion) in the first half from the year-earlier period, Bloomberg-compiled data show.
Glorious’s 2018 notes dropped 0.3 cents on the dollar to 88.6 cents as of 5:40 p.m. in Hong Kong, the lowest in two weeks, according to Bloomberg-compiled prices.