(Bloomberg) — Another Chinese developer fell into crisis on Monday after failing to repay a maturing bond, adding to the strains of the nation’s heavily leveraged property firms following industry giant China Evergrande Group’s debt woes.

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Fantasia Holdings Group Co. didn’t repay a $205.7 million bond that was due Monday, according to a company statement. Separately, property management company Country Garden Services Holdings Co. said that a unit of Fantasia didn’t repay a 700 million yuan ($108 million) loan that also came due on Monday and that a default was probable.

Signs of stress in China’s property sector are spreading, as lower-rated developers face a surge in bond yields to a decade high. Evergrande, the world’s most indebted developer and biggest issuer of junk bonds in Asia, is headed toward what could be one of the nation’s biggest restructurings and fueling concern about wider market contagion. Shares in Evergrande and its property management unit were suspended from trading Monday, pending an announcement on a “major transaction.”

Read the latest Evergrande Update here

Fantasia itself poses fewer risks to broader markets than Evergrande due to its smaller size. It ranked 60th in a list of contracted sales in the first quarter of this year vs 3rd for Evergrande. Fantasia’s total liabilities were $12.9 billion as of June 30, according to the company’s first-half report, compared with $304.5 billion for Evergrande. It has about $4.7 billion in outstanding offshore and local bonds, vs Evergrande’s $27.6 billion, Bloomberg-compiled data show.

The market had also already been expecting problems. Fantasia was among the worst performers last month in a Bloomberg China high-yield dollar bond index. The private-banking units of Citigroup Inc. and Credit Suisse Group AG had stopped accepting its notes as collateral, Bloomberg reported in September.

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Still, Fantasia’s nonpayment spotlights concerns that have become increasingly common throughout China’s real estate industry as investors struggle to quantify often hard-to-see debts. Just last week, the developer refuted a report that money for a privately placed bond hadn’t been transferred. The risks of opaque obligations were also flagged in recent days when people familiar said that a widely unknown dollar note with an official due date of Oct. 3 issued by an entity called Jumbo Fortune Enterprises is guaranteed by Evergrande.

Prices on Fantasia’s bonds tumbled earlier on Monday as speculation mounted that it would struggle to meet its obligations. The company’s 6.95% of dollar-denominated notes due in December plunged nearly 30 cents on the dollar to 38 cents, according to the bond-price reporting system Trace.

Shenzhen-headquartered Fantasia’s management and board “will assess the potential impact on the financial condition and cash position of the Group” stemming from the skipped bond payment, it said.

Country Garden Services announced an agreement last month to acquire the property management business assets from Fantasia’s Colour Life Services Group. Country Garden said Monday that it was enforcing a provision in the deal that would transfer shares of the Fantasia unit to one of Country Garden’s companies.

Chinese authorities have maintained strict rules on leverage, while measures to cool the housing market are damping sales. Recent days have brought more examples of stress at other property firms. Sinic Holdings Group Co. has received a demand to repay some debt after missing two local interest payments.

Fitch Ratings followed its peers on Monday by cutting Fantasia’s credit grade several notches to CCC-, deep into junk territory. S&P Global Ratings lowered its long-term rating on Fantasia on Sept. 29 to CCC from B, citing “elevated risk” that it may not be able to implement a concrete repayment plan over the next several weeks for upcoming maturities. Moody’s Investors Service also cut its rating by one notch to B3.

Fantasia said last week it had wired principal and interest on a $100 million privately placed bond, refuting a report that funds had not been transferred.

(Adds further background.)

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