HONG KONG, Oct 18 (Reuters) – The grace period for a
Country Garden $15 million coupon payment has expired
without word of payment, fueling expectations that China’s
biggest private property developer has defaulted on its offshore
debt as the nation’s real estate woes deepen.
Non-payment would trigger cross defaults in other Country
Garden bonds as is standard in bond contracts. The company has
almost $11 billion of offshore bonds and a default would set the
stage for one of China’s biggest corporate debt restructurings.
One bondholder of the tranche in question, who declined to
be identified discussing confidential information, said he had
not received payment on the coupon as the grace period ended.
Country Garden reiterated on Wednesday it expects it will be
unable to meet all of its offshore debt obligations and hopes to
seek a “holistic” solution to its difficulties.
Its statement did not directly address the question of
whether there had been a default and representatives of the
company declined to comment.
“If they don’t pay within the grace period, it will be a
default,” said Cedric Rimaud, analyst at GimmeCredit, an
independent corporate bond research house, referring to Country
Garden’s missed payment.
Scores of other Chinese property developers have defaulted,
reeling from liquidity problems since 2021 when the government
introduced measures to rein in the sector’s very high…