Embattled Chinese property developer Country Garden faces yet another liquidity test with Monday's deadline to pay $15 million in interest linked to an offshore bond, after having dodged default at the last minute twice this month. Country Garden, whose financial woes have worsened the property sector outlook and spurred a raft of support measures from Beijing, will have a 30-day grace period to pay the coupon before it is considered in default. The coupon payment had not been received by late afternoon on Monday, said one holder of the bond tranche, who sought anonymity as they were not authorised to speak to media.
HONG KONG - Embattled Chinese property developer Country Garden faces yet another liquidity test with Monday's deadline to pay $15 million in interest linked to an offshore bond, after having dodged default at the last minute twice this month.
If Country Garden fails to pay the coupon before the grace period ends in mid-October, the principal will become due and any failure to service will trigger cross-default terms, said Sandra Chow, co-head of Asia-Pacific research at CreditSights. Shares in Country Garden, one of the few large Chinese developers that have not defaulted on debt obligations, ended down nearly 2%, outstripping a fall of 1.4% in the benchmark index.
In August the developer missed coupon payments of $22.5 million tied to two dollar bonds but managed to wire funds before a grace period ended this month, dodging a default.Last week, onshore bondholders approved three-year extension of repayments on seven other Country Garden bonds. Still, a survey report by JPMorgan last week showed investors' biggest concern was "ineffective" policy response, followed by a spillover into the banking system, and a double dip in property sales.
Zhongrong, which traditionally had sizeable real estate exposure, missed payments on dozens of so-called trust products since late July, roiling markets and fuelling fears that the property sector crisis could threaten the financial system.
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Cash-squeezed developer Country Garden faces another dollar coupon deadlineEmbattled Chinese property developer Country Garden faces yet another liquidity test with Monday's deadline to pay $15 million in interest linked to an offshore bond after having dodged default at the last minute twice earlier this month. The country's No.1 private developer, whose financial woes have worsened the property sector outlook and prompted Beijing to unveil a raft of support measures, will have a 30-day grace period to pay the coupon before it would be considered in default. If Country Garden fails to pay the $15 million before the grace period ends in mid-October, the principal will become due immediately and any failure to service will trigger cross-default terms, said Sandra Chow, co-head of Asia-Pacific research at CreditSights.
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Cash-squeezed developer Country Garden faces another dollar coupon deadlineBy Xie Yu HONG KONG (Reuters) - Embattled Chinese property developer Country Garden faces yet another liquidity test with Monday's deadline to pay $15 ...
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