Country Garden Holdings Co., helmed by one of China’s richest women, Yang Huiyan, has left investors in the dark after dollar bondholders said they’ve yet to receive coupon payments effectively due Monday. That puts the firm—which had 1.4 trillion yuan ($199 billion) of total liabilities at the end of last year—on course for its first public default if it doesn’t make the payments within a 30-day grace period.

Formerly the nation’s largest private-sector developer by sales, the builder of more than 3,000 housing projects in smaller cities is a household name and employed about 70,000 people at the end of last year. That status had given it the firepower to withstand an industry cash crunch that led to record defaults since Evergrande first missed bond payments in 2021. But tumbling industry home sales and soaring refinancing costs are threatening that streak.

“Any default would impact China’s housing market more than Evergrande’s collapse as Country Garden has four times as many projects,” Bloomberg Intelligence analyst Kristy Hung wrote in a report Wednesday. “Any debt crisis at Country Garden will have a far-reaching impact on China’s housing market sentiment and could significantly weaken buyer confidence on solvent private developers.”

Home sales in China are falling again, dashing hopes that policy steps to prop up the industry would spur a lasting rebound. And with creditors demanding prohibitively high yields to lend more money, even Country Garden was forced to say this week that the refinancing situation has crimped its cash flow.

The company, which has developments in almost every province in China, is the latest developer to be jolted by the crisis in the nation’s real estate industry. Its annual report shows that about 60% of its projects are located in so-called Tier 3 and Tier 4 cities, which usually have a smaller population and weaker housing demand.

Holders of the two securities said they hadn’t received the coupons as of Wednesday afternoon, and the firm didn’t respond to questions about whether it had made the payments. 

The developer’s next dollar bond to mature has dropped as low as 11 cents, in a sign of how dire investors see the situation. Country Garden’s shares fell as much as 8.9% in Hong Kong on Wednesday to reach the lowest level since November 2022, and three brokers have downgraded the stock. 

The developments are feeding into broader unease in the Chinese high-yield dollar bond market, where average prices have dropped deeper into distress at about 67 cents—near the lowest this year.

Country Garden was established in Foshan City in China’s Pearl River Delta region in 1992. Chairman Yang has a fortune of $5.5 billion, making her the country’s fourth-richest woman, according to the Bloomberg Billionaires Index. Yang is the daughter of founding chairman Yeung Kwok Keung who transferred his stake to her in 2005. She succeeded him as sole chairman earlier this year.

The prolonged slump in China’s property sector has brought previously sound companies to their knees, with the likes of Central China Real Estate Ltd., a state-backed developer, repeatedly using grace periods to buy time before stopping payments. In July, creditors of a unit of Dalian Wanda Group Co. and state-backed Sino-Ocean Group Holding Ltd. received coupons at the last minute. 

Developers using grace periods for coupon payments “is a bad signal that reflects tight liquidity,” said Iris Chen, a credit desk analyst at Nomura International HK Ltd. But distressed developers might not care that much as their bonds are already trading at low cash prices, she added.

–With assistance from Shuiyu Jing.

[Editor’s note: This headline has been updated to clarify it would be a collapse for a firm with $199 billion of liabilities.]