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Creditors of Country Garden (OTCPK:CTRYF) reportedly extended a payment deadline for an onshore private bond, which will allow the troubled Chinese real estate developer to avoid a default, bringing some relief to the country’s debt-ridden property sector.
The deadline for payments for the 3.9B yuan ($536.4M) bond was pushed to 2026, according to multiple media reports. The payments were earlier due on Saturday.
In addition, Country Garden (OTCPK:CTRYF) informed lenders that it made a 2.85M ringgit ($612.2K) coupon payment due on a separate ringgit-denominated bond, Bloomberg reported citing unnamed sources.
China’s real estate sector has been facing a liquidity crisis, with Country Garden (OTCPK:CTRYF) missing payments on dollar-denominated notes and China Evergrande (OTC:EGRNF) filing for Chapter 15 bankruptcy protection.
Although Country Garden’s (OTCPK:CTRYF) liabilities are only 59% of Evergrande’s (OTC:EGRNF), it has 3.1K projects across China compared to Evergrande’s ~800, Reuters reported.
Country Garden’s Hong Kong-listed shares, which have declined 62.1% YTD, ended 14.9% higher on Monday.
Note that Moody’s recently downgraded Country Garden’s ratings and maintained its negative outlook, citing its “tight liquidity and the likely weak recovery prospects for bondholders.”
Even so, the debt deal – along with Beijing’s stimulus actions – pushed the Hang Seng Mainland Properties Index 8.2% higher. The Shanghai Composite Index (SHCOMP) closed up 1.4% and the Hang Seng Index (HSI) rose 2.5%.