Country Garden faces dollar, ringgit bond interest deadlines
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A residential complex being built by the troubled developer Country Garden, in Nantong, China on Aug 19, 2023.
PHOTO: NYTIMES
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SHANGHAI – Embattled Chinese developer Country Garden Holdings faces another round of debt deadlines on Wednesday, including one for dollar bond interest.
The builder, which has become the face of China’s broader property debt crisis,
There is also RM7.81 million (S$2.28 million) of interest due on a Malaysian note maturing in 2025, according to data compiled by Bloomberg. The security has a five-day grace period.
Any payment failures could send fresh shockwaves through the country’s property market, which the authorities have been trying to stabilise amid a years-long debt crisis.
Sentiment has already been shaken further in recent days after a long-awaited debt restructuring by peer China Evergrande Group screeched to a halt.
While Country Garden has so far avoided defaulting, investors remain doubtful about its ability to survive China’s real estate crisis, which shows no signs of abating.
Last week, the company missed an initial deadline to pay US$15.4 million of interest on another dollar security, and met other obligations only at the last minute, just as grace periods were ending.
Most of the company’s dollar bonds have slid to deeply distressed levels of between seven US cents and 11 US cents, after some were near 80 US cents in June.
The developer’s operations are focused in smaller cities, which expanded faster in good times but have been harder hit by the housing slump and economic slowdown than top-tier cities such as Beijing and Shanghai.
“China still has policy tools in reserve to stabilise residential sales in the country’s largest cities,” said S&P Global Ratings analysts Iris Cheng and Edward Chan in a research report published on Monday. “We do not expect lower-tier cities will get the same support as in the last big downturn.”
Country Garden’s contracted sales plunged 72 per cent from a year earlier in August, worsening after declines in previous months and after the builder warned about “major uncertainties” regarding its ability to repay its debt. BLOOMBERG
