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Chinese developer Glorious Property has said it will be late paying $26.5m in interest on a $400m bond – which technically puts the loan into default.

The developer said in a filing to the Hong Kong stock exchange the that the grace period for the payment – originally due on 4 March – ended on Monday, but that it would settle the bill on 5 April when Hong Kong and China markets reopen after a bank holiday.

Repayment terms state the company must make interest payments within 30 days of the due date or be liable to repay the whole bond including interest.

Glorious Property reported a Rmb4bn ($580m) loss for the year ending December 2016 as its total borrowings increased to Rmb27.7bn.

The bond in question was issued in 2013 and is due to be redeemed next year. As of January 2015, it traded as low as 52 per cent of face value but has since rallied to trade at 96 cents on the dollar.

Chinese authorities have introduced tighter rules stopping property developers from issuing exchange-traded bonds in the mainland as part of wider efforts to contain risks surrounding excess leverage.

Deals for the traditionally quieter December to February period fell to an average of Rmb750bn a month, down 41 per cent compared to the same period in 2015, according to a report by Fitch.

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