Chinese property developers face a $13bn wall of foreign currency bond payments in the second half of this year, as a mounting default tally darkens the market outlook.

China’s real estate sector has struggled to come to grips with slowing growth coupled with authorities’ efforts to rein in excess leverage. Waves of defaults have been triggered across the industry, unnerving fixed-income investors who frequently relied on developers’ offshore dollar bonds to deliver outsize returns during the era of ultra-low interest rates.

Real estate company Shimao Group’s default on a $1bn bond last Sunday has heightened concerns among bondholders with exposure to Chinese developers, who have long been a central driver of issuance in Asia’s high-yield dollar debt market. The Shimao bond had traded at just 12 cents on the dollar last week — pointing to high levels of financial distress — ahead of the payment deadline.