Marc Jones and Andrew Galbraith

SHANGHAI/LONDON – China’s largest homebuilder, Country Garden by sales, suffered a Monday bond slump as the property crisis in China continued unabated.

Country Garden’s bonds suffered the worst week ever. Monday’s sharp fall of as high 17 points put most of its international debt at between 25 and 35 percent of their face value.

Analysts quoted reports that it dropped its plans to raise $300 Million last week because of insufficient demand from debt market investors.

Country Garden’s spokesperson said that the company does not plan on selling a convertible bond right now.

Himanshu Porwal from Seaport Global said, “It just appears to be the fear element playing out.” “People are just trying to mark down everything as little as possible.”

Country Garden shares had fallen 8% in Hong Kong. But it wasn’t only that.

Central China Real Estate fell by 20.3%, Yuzhou Group Holdings (KWG Group Holdings), Jingrui Holdings dropped as high as 20%, and Jingrui Holdings also declined.

Chinese developers now face an unprecedented liquidity crisis due to decades-old regulatory restrictions on borrowing. These have led to many offshore debt defaults, credit downgrades and the sale of developer shares and bonds.

According to the World Bank’s Economic Prospects Report, last week’s downturn in China’s Real Estate Sector would result in significant economic consequences. The total liability of developers amounts to nearly 30% of China’s GDP.

Colm D’Rosario is an asset manager and high-yield manager at Amundi. He said that the crisis has become a cash crunch.

Primary concern: Many of China’s large developers are still obligated to pay huge amounts in debt this year.

D’Rosario explained that while they do not want to spiral downward, the government must take some steps.