Country Garden making ‘best effort’ to raise US$13 million bond coupon within grace period as China housing crisis crushes home sales

Country Garden Holdings said it is doing its best to raise cash and repay holders of its local-currency bonds and avert a default, after a multi-year housing slump damaged confidence, home sales and cash flows.

The distressed developer did not pay the 96 million yuan (US$13.3 million) annual coupon on Tuesday to holders of a March 2026 bond as the fund “is not fully ready,” it said in a reply to the Post. The company has not yet defaulted on the note, which has a 30-day grace period, it added.

Country Garden raised 2 billion yuan at 4.8 per cent annual interest from the bond sale in March 2021, one of the securities in the group’s 102 billion yuan worth of bonds owed to local and foreign investors at the end of June 2023, according to its interim report published in September.

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Boom, bust and borrow: Has China’s housing market tanked?

Boom, bust and borrow: Has China’s housing market tanked?

The money was not ready for the March 12 payment “because the sales recovery situation did not meet expectations and the capital allocation was under pressure,” Country Garden said. “We will give our best efforts during the grace period by pushing sales, revitalising assets and reducing unnecessary administrative expenses.”

Country Garden reports 85% slump in home sales in fresh alarm for creditors

China’s housing market crisis has lingered for almost four years, ever since Beijing introduced its “three red lines” policy that shut the industry’s weakest borrowers out of the capital market for funding.