All of Country Garden’s offshore debt will default if China’s largest real estate developer fails to pay a $15 million coupon on October 17. reports Reuters.
Failure to pay this tranche could result in cross-default on other bonds, which is standard for bond contracts, the agency said.
The lack of payments is expected after Country Garden last week warned of its inability to meet offshore debt obligations. She also said that she had not made payments on the debt, which amounts to 470 million Hong Kong dollars ($60.1 million).
Country Garden’s total offshore debt is close to $17 billion, of which $11 billion is in offshore bonds and $6 billion in offshore loans, Reuters writes.
Country Garden shares closed at HK$0.75 ($0.096) during trading on October 17 on the Hong Kong Stock Exchange (HKEX).
According to JPMorgan, developers who account for 40% of housing sales in China have now defaulted on their debt obligations as of 2021. According to CreditSights, Chinese developers have defaulted on more than $114.6 billion of $175 billion in dollar bonds. in circulation since 2021
Earlier, Finam FG analyst Natalia Pyryeva drew attention to the problems of the developer Country Garden Holdings. She is in the commentary to Vedomosti notedthat they could “hit the Chinese economy much harder” than the situation with another developer Evergrande, which marked the beginning of the crisis in the construction industry.