China Credit Stress Spreads Wider as Developer Defaults on Bond

A Chinese residential developer defaulted on a domestic bond, as credit stress in the world’s No. 2 economy shows no sign of abating.

Fujian Fusheng Group Co., a mid-sized builder based in the southeastern province of Fujian, said it failed to repay investors who requested early redemptions worth 631 million yuan ($96 million), including both principal and interest, for its 1 billion yuan 3-year bond that will come due next year, according to a company filing to the Shanghai Stock Exchange on Thursday. The puttable note carries no grace period for early redemptions, according to the bond’s prospectus.