Too little too late? Chinese developer misses bond payment even as the state dives in to save ailing property sector

A Chinese developer has defaulted on two dollar bonds and is halting payments on offshore notes, the latest delinquencies despite a plethora of recent government steps to ease the sector’s liquidity crunch.

Times China Holdings did not pay coupons on two dollar notes before grace periods ended within the past week, it said in a Wednesday night filing with Hong Kong’s stock exchange. An event of default occurs if the company fails to pay interest within 30 days of the due date, according to a circular for one of Times China’s dollar bonds.

The company’s payment suspension followed a warning days earlier of a likely halt amid holistic management of its offshore debt. Times China has engaged China International Capital Corp. as financial adviser and Sidley Austin as legal adviser to facilitate debt talks.

Chinese builders defaulted on a record amount of dollar bonds last year, fallout from a property-sector crackdown that left many builders with shrinking cash levels and fuelled more than a year of falling new-home sales. The government has unveiled a series of steps to arrest the slump, and fresh help is looming for some of China’s too-big-to-fall developers, according to people familiar with the matter.

Times China, the country’s 51st-largest builder by contracted sales last year, has faced debt-repayment pressure for months amid weakened liquidity and limited funding access. In a downgrade ahead of Times China’s missed-payment disclosure Wednesday, Moody’s Investors Service cited a “high likelihood” of default and “weak recovery prospects” for creditors.