The major economic and financial problems in the Chinese property development sector continue to mount with the announcement by Fantasia Holdings this week that it had failed to make a payment on a bond.
Just a few weeks ago, Fantasia issued an assurance that it had “no liquidity issue” but on Monday announced “that it did not make the payment” on a $206 million bond.
Last month Evergrande, the most indebted property development company, missed a payment on a dollar-denominated bond, triggering a 30-day grace period before a default is declared.
The question being asked in Asian markets is how far the financial crisis will spread to other property developers, which account for a large portion of the high-yield or so-called junk bond market.
Dickie Wong, the head of…