Country Garden confirms it likely won't meet offshore debt deadline
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More news: Embattled property developer Country Garden could be the next domino to fall in a wave of defaults threatening China's property sector. China's biggest private developer told Bloomberg it would be unlikely to be able to meet a US$15.4 million ($24.1 million) interest payment on an offshore debt.
What they said: “The company expects that it won’t be able to meet all of its offshore payment obligations on time, due to a deep correction in China’s home market and its subdued sales,” Country Garden said in a statement.
Country Garden debt payment deadline passes
The news: The deadline on a debt owed by China's biggest private property developer has passed, fuelling speculation Country Garden will become the latest Chinese developer to default on offshore debts. Reuters reports an unidentified bondholder of the debt tranche claims the developer has not met the coupon payment deadline.
The numbers: Country Garden, which has been at the centre of China's property crisis, could default on its USD11 billion ($17.3 billion) debt if it failed to make a USD15 million payment by 3pm AEDT today. Country Garden has total liabilities of USD187 billion, Bloomberg reports. China's struggling property sector accounts for roughly a quarter of the national economy.
The context: In September, Country Garden successfully gained extensions for payments on its onshore debts, but defaulting on its offshore creditors could lead to a large and lengthy debt restructuring. Property investment in China fell 9.1% for the first nine months in 2023, and roughly two-thirds of China's top 50 developers have already suffered delinquencies on offshore debts, according to Bloomberg.
