Country Garden misses yuan bond coupon payment for first time
COUNTRY Garden Holdings missed a coupon payment on a yuan bond for the first time, according to sources familiar with the matter, adding to the woes of the Chinese developer that is now facing a lawsuit seeking its liquidation offshore.
The builder’s main onshore unit has not paid a 96 million yuan (S$18.2 million) coupon that came due on Tuesday (Mar 12) for a 4.8 per cent yuan bond maturing in 2026, said the sources, who asked not to be identified, citing disclosure rules. There is a 30 trading-day grace period for the payment, before any default could be called, the sources added.
Country Garden roiled markets when it defaulted on its US dollar debt in October, but has so far managed to avoid doing so on its local-currency obligations. In September, the developer extended more than 10 billion yuan of yuan bonds by three years. After that, it paid several coupons and in December paid off an 800 million yuan note.
The company did not immediately offer a comment when reached. Mainland media outlet The Paper reported the missed payment earlier.
The developer’s shares snapped a three-day advance on Tuesday to fall as much as 4.9 per cent to 58 Hong Kong cents. Its US dollar bonds still trade at deeply distressed levels of around 8 Hong Kong cents on the dollar.
Country Garden’s crisis entered a new chapter after a Hong Kong court last month received a creditor’s petition to wind up the Guangdong-based company. The lawsuit may add to pressure on the developer to advance a debt restructuring plan.
A sales drought for the builder has worsened. Contract sales for February plunged 85 per cent from a year earlier, widening from a 75 per cent slide in January, corporate filings showed.
Homebuyers in China are avoiding defaulted developers on concerns about their ability to complete housing projects. Now the focus is turning to China Vanke, a state-backed builder that is in talks with creditors to stave off a default. BLOOMBERG
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