Chinese Developer’s $4.6 Billion in Offshore Debt Is in Doubt After Default

Chinese Developer’s $4.6 Billion in Offshore Debt Is in Doubt After Default

A developer of industrial parks joined the ranks of Chinese companies defaulting on international borrowings, with its failure to repay a maturing bond casting doubt over the entirety of its $4.6 billion in dollar-based debt.

While eager to support growth and avoid market turmoil, Chinese authorities have grown more tolerant of defaults in recent years, both by private companies and state-backed ones, as they try to erode market assumptions that investors will always be made whole.

China Fortune Land didn't repay holders of a $530 million note due Sunday, prompting Fitch Ratings to downgrade it to a “restricted default” rating Tuesday morning Hong Kong time. The company has $9.8 billion of bonds outstanding, including $4.6 billion of offshore bonds, according to a February note from credit analysts at Goldman Sachs.





Late last week, China Fortune Land said it needed time to fix a short-term cash shortage, adding that it aimed to seek a “consensual resolution” with offshore bondholders and to treat domestic and international creditors fairly and reasonably. The company said it had