China Evergrande missed a fresh round of bond payments on Tuesday.
The ailing property developer was due to pay $148 million to overseas creditors.
That's its third miss in as many weeks, and expectations of any payment were always slim.
Evergrande has liabilities of more than $300 billion, including nearly $20 billion in offshore debt.
The firm has been prioritizing domestic creditors.
But the mounting fears of a messy collapse are now hammering the whole Chinese property sector.
Another developer, Modern Land, is asking for more time to repay what it owes, while Sinic Holdings said it would likely default next week on bonds worth $250 million.
That company's shares were suspended last month after plunging nearly 90%.
Traders have also been unable to buy or sell Evergrande shares after trading in them was suspended last week.
Shanghai Stock Exchange data showed the top five losers among exchange-traded bonds in Tuesday morning deals were all issued by property firms.