Chinese Country Garden defaults on dollar bonds for the first time

Chinese developer Country Garden Holdings Co. defaulted on dollar bonds for the first time. Bloomberg reported this on October 25.

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It noted that the company failed to make interest payments on $15.4 million of debt when due on Sept. 17, and failed to do so within a 30-day grace period that ended last week.

Country Garden’s failure to pay interest on its debt during the grace period is a default, trustee Citicorp International Ltd said in a statement. for bond holders.

Earlier this month, Country Garden said in response to an agency inquiry that it “will likely be unable to meet its obligations on all dollar bonds due to the “deep correction in China’s housing market and the decline of sales.”

The developer is awaiting debt restructuring, totaling nearly $186 billion. Thus, the company is one of the world’s largest debtors to developers.

Following trading in Hong Kong on Wednesday, October 25, shares of Country Garden fell in price by 2.8%; since the beginning of this year, their value has fallen by 74%.

According to the agency, for several years the company was the largest developer in China in terms of sales before falling to seventh place in 2023. Despite this, it recently had more than 3,000 housing projects and approx. 70,000 employees.

According to Bloomberg, the bankruptcy of Country Garden will have serious consequences for China’s real estate market, which is experiencing a debt crisis for the fourth consecutive year.

Let’s remember that in April the IMF gave the worst forecast for the global economy in the last thirty years.