ALBAWABA – China’s Country Garden won creditor’s support to extend the repayment on $1.4 billion in local bonds, as the cash-strapped developer manoeuvres around multiple debts, interest payments and bonds, Bloomberg reported Wednesday.
Creditors, who hold bonds and securities issued by the company, voted in favour of the company’s plan to stretch principal payments by three years, unnamed sources told the New York-based news agency.
The extension leaves just about $274 million of principal and interest payable on local notes with maturities or put options in 2023.
The announcement drove Chinese property developer shares, with Country Garden up 6.5 percent, according to Bloomberg.
China’s Country Garden’s victories, however, don’t alleviate looming longer-term challenges. The firm has become a symbol of a broader property debt crisis that’s led to record defaults and prompted authorities to adjust policy to avoid more contagion.
China’s Country Garden has become a symbol of the country's debt-laden properties sector - Shutterstock
Apart from local debts, China’s Country Garden also faces several offshore bond interest payments before its next major test when a $1 billion bond matures in January next year.
The firm has so far avoided defaulting but recently warned it still could, after posting a record first-half loss of almost $7 billion, as reported by Bloomberg.
As a result, the company’s dollar securities continue to hover at deeply distressed levels, around $0.09-$0.14.
Any future failures to honor debts could impact China’s whole housing market even more than a landmark default in late 2021 by China Evergrande Group. China’s Country Garden has four times as many projects as China Evergrande Group.
