CHINESE developer Radiance Holdings Group defaulted on a US$300 million bond after it missed a payment due on Wednesday (Mar 20), dealing a shock to investors who bet on a timely repayment over the past few days.

The Beijing-based builder pointed to extreme pressure in China’s property sector and lack of improvement in sales, in a statement filed to the Hong Kong exchange, saying that it will “exert its utmost effort” to ensure property delivery.

Radiance’s default caps a turbulent month for the builder, during which its bonds soared to 88 cents on the US dollar as at Tuesday after trading at a deeply distressed level of around 50 cents two weeks ago.

Chinese developers may face more defaults as home sales and buyer confidence remain weak. Declines in prices of both new and used homes deepened last month from a year earlier, even as they eased slightly on a month-on-month basis, official data showed. Policy steps to shore up the beleaguered market have so far failed to prevent more delinquencies in the bond market.

Radiance was China’s 50th biggest developer by sales last year, according to research firm China Real Estate Information. Its key onshore unit has sold two local bonds guaranteed by state-owned China Bond Insurance, including an 800 million yuan (S$148.6 million) note in December. As one of the few developers that has access to local refinancing support, its default could further weaken investor confidence over other cash-strapped developers. BLOOMBERG