(Yicai Global) Oct. 26 -- Modern Land China, a builder of energy-saving homes, said it has defaulted on USD250 million of bonds, making it the ninth Chinese real estate developer to miss a debt payment this year.

Modern Land said in a filing that it had not repaid the principal and interest on its 12.85 percent senior notes that matured yesterday due to “unexpected liquidity issues” caused by adverse factors such as the macroeconomic, realty sector and pandemic environments.

The Beijing-based small developer unsuccessfully tried to bail itself out by seeking an extension on the bond’s maturity and selling a stake in its property management affiliate. The company has also been downgraded by credit rating agencies and trading in its shares [HKG: 1107] was suspended on Oct. 21.

Modern Land has taken on more debt in recent years to expand, with high coupon rates on its bonds eating into earnings. Last month alone, contracted sales fell 23 percent from a year ago to CNY3.6 billion (USD558.4 million), while the contracted sales area shrank 20 percent to 367,300 square meters.

Nine Chinese developers have now defaulted on US dollar bonds in 2021, according to data compiled by Industrial Securities. The others are Oceanwide Holdings, Fantasia Holdings Group, China Fortune Land Development, Sunshine 100 China Holdings, Tianfang Group, Tahoe Group, Sinic Holdings, and Sichuan Languang Development. They owed a collective USD28.1 billion.

Recent statements by Chinese regulators included changes to margins and adjustments to local land auction policies that have to some extent guaranteed that developers operate with profit margins, Industrial Securities noted.

But for investors, the policy focus in the short term still needs to be on financing, whether there will be an improvement in financing, resulting in a better safety margin, it added.

Editors: Zhang Yushuo, Peter Thomas