It does not seem worried. Thailand s biggest property company is completing 5,000 more units at Muang Thong Thani. But many others are nervous. Early this month, medium-sized Somprasong Land defaulted on interest payments to its Eurobond holders. The company says it will engage outside parties to value its assets and restructure its liabilities.
Bankruptcy is a real possibility.
The case is being watched closely and so are the convertible bonds and straight Eurobonds of other firms, says Dalit Awasthi, head of fixed income research at Union Bank of Switzerland in Singapore. For Thailand s more than 1,000 property firms, the day of reckoning is coming. Warnings of a meltdown have been growing strident over the past year as the glut in all property sectors continued to mount. The government has announced a rescue plan, but many doubt its effectiveness. The slowing economy is not helping.