China property firm fails to make bond payment

A Chinese property developer has confirmed it failed to make a $23 million interest payment on a dollar-denominated bond, a statement said, raising worries over the country's weak real estate sector.
Kaisa Group Holdings, which is based in the southern city of Shenzhen, said in a statement late Monday that it did not make a scheduled payment last week on a $500 million bond.
Hong Kong-listed Kaisa could become the first Chinese developer to default on US dollar-denominated bonds, Bloomberg News reported.
"The company did not make a scheduled interest payment of US$23 million which was due 8 January, 2015," Kaisa said in a statement.
"The company is currently assessing its financial position and will make further announcement regarding such interest payment," it said in the statement to the Hong Kong stock exchange.
Kaisa is seeking a financial advisor for restructuring, the statement added.
Last year Chaori Solar Energy Science and Technology Co. became modern China's first ever onshore corporate bond default after it failed to make payments of 89.8 million yuan ($14.7 million) for a five-year bond issued in 2012.
Kaisa ranked 15th in terms of "comprehensive strength" among China's top 100 listed property firms last year, according to an industry survey.
Ratings agency Moody's, which downgraded the company last week, said recent developments will undermine property buyers' confidence in Kaisa, particularly in its home market of Shenzhen.
Kaisa's financial woes come as China's property market slows, prompting some cities to roll back policies required by the central government to control housing prices.
Home prices in China's 100 major cities fell 2.69 percent in 2014 from a year earlier, according to the independent China Index Academy.
"Looking into 2015, the national market will still be under high inventory pressures... and downside pressures remain on house prices," it said.