Chinese property giant Country Garden pays its dollar bond interest within grace period, narrowly averting a default
Aly Song/Reuters
- China's Country Garden paid the interest on two US bonds within their grace periods, per media reports.
- On August 6, it failed to pay the interest of about $22.5 million on two dollar-denominated bonds.
- The property giant also won approval from creditors to extend the maturity of an onshore bond.
Chinese property giant Country Garden has paid the interest on two US dollar bonds within their grace periods, according to multiple media reports on Tuesday.
The payments mean that Country Garden — one of China's largest private developers — has managed to avoid a default just before one of the bond's grace period expires on Tuesday, per Reuters.
On August 6, the company failed to pay the interest totaling $22.5 million on two bonds due in February 2026 and August 2030. It then had 30 days to make the payments before going into official default.
The offshore bond interest payments followed Country Garden's creditors agreeing to extend the maturity of a 3.9 billion yuan, or $535 million, onshore bond on Friday, Reuters reported, citing sources and a document.
The developments at Country Garden are closely watched because the company — which had almost $200 billion in liabilities at the end of 2022 — is the latest high-profile Chinese real-estate giant to face a liquidity crunch in two years as China's economy struggles to recover following the COVID-19 pandemic.
The drama at the private developer even renewed contagion fears that trouble in the world's second-largest economy could spill over to other sectors in the country and globally.
Country Garden did not immediately respond to a request for comment from Insider.
Country Garden Holdings' shares were 2% lower at 1 Hong Kong dollar apiece at midday on Monday. The stock is down 63% so far this year.
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