• Chinese developer Shimao Group Holdings Ltd. failed to pay a $1 billion bond that matured Sunday.
• Company says it has not made principle payments on a number of other offshore debts.
• Company is one of China’s leading issuers of real estate-related debt.

Chinese developer Shimao Group Holdings Ltd. stated that it did not pay a $1 billion note that matured on Sunday, contributing to a record year of defaults on offshore bonds in the sector.

The luxury builder said in a filing with the Hong Kong stock exchange that it has not made principle payments on a number of other offshore debts and has been in discussions with creditors to find “amicable resolutions.” According to the company, “creditors may have the right to demand repayment acceleration” if Shimao is unable to repay its debts.

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Since China’s real estate market has been subjected to an unprecedented wave of delinquencies, the company’s financial health has been a source of mounting concern for months. Shimao, the nation’s fourteenth-largest developer by contractual sales last year and also a builder of commercial structures, failed to repay a private loan last month, a default that heightened fears about hidden costs among Chinese builders.

“Due to market uncertainties over debt refinancing and generally challenging operating and funding conditions, the group experienced negative developments on its credit ratings and the occurrence of principal nonpayments under certain of its offshore indebtedness,” said Shimao in its filing Sunday.

The company announced in a separate statement that it had sold roughly 20 additional real estate projects to raise funds. In addition, it anticipates a quickening of cash inflow from property transactions as the property market shows indications of recovery. According to China Real Estate Information Corp., sales of new homes in 30 major Chinese cities increased by an estimated 31% in June compared to May.

In the meanwhile, Shimao has recruited Admiralty Harbour Capital Ltd. as its financial adviser and Sidley Austin as its legal adviser to assist it in evaluating its capital structure, liquidity, and options, according to a filing with the exchange.

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Shimao stated that it has gotten written support from the majority of its dual-currency term loan lenders. According to the petition, the lenders also stated they do not intend to pursue any enforcement action about the funding at this time.

The developer is one of China’s leading issuers of real estate-related debt. According to data provided by Bloomberg, it has roughly $10 billion in outstanding onshore and offshore bonds.