China Evergrande Group shares fell on Thursday after the embattled real estate developer failed to pay offshore coupons that were due earlier this week.
Evergrande, whose $19 billion in international bonds are in cross-default after missing a coupon payment deadline earlier this month, had new $255 million coupon payments due on Tuesday for its June 2023 and 2025 notes.
According to three sources with knowledge of the situation, at least some investors holding the two bonds have yet to receive the coupons. Both payments have a grace period of 30 days.
Evergrande's shares fell 9.1% on Thursday, while the Hang Seng index rose 0.1%.
Evergrande's Thursday decline erased gains made earlier this week when the market applauded the firm's initial progress in resuming construction work.
In a meeting on Sunday, company Chairman Hui Ka Yan pledged to deliver 39,000 units of property in December, up from fewer than 10,000 in each of the previous three months.
"(The non-payments) show Evergrande is still not doing okay even though it is delivering homes," said Thomas Kwok, head of equity business at CHIEF Securities in Hong Kong.
Market confidence in Evergrande and the Chinese property sector is low, as more defaults are possible with many bonds due in January, according to Kwok.
Evergrande has over $300 billion in liabilities and is scrambling to raise funds by selling assets and shares to repay suppliers and creditors.
The fate of Evergrande and other indebted Chinese property companies has engulfed financial markets in recent months, with Beijing repeatedly attempting to reassure investors.