HONG KONG, Sept 11 (Reuters) – Embattled developer Country Garden has already avoided two last-minute defaults this month in a bid to bring some respite to the crisis-hit Chinese company. , faces a new vote by creditors on Monday to extend some debt maturities. Real estate sector.
The vote is expected to end by 10pm Hong Kong time (14:00 Japan time), with domestic creditors approving a proposal by Country Garden (2007.HK) to extend the repayment of eight domestic bonds for three years. You will have to decide whether or not.
The latest vote came after the country’s largest private developer received approval from creditors on September 1 to extend payments on a 3.9 billion yuan ($533 million) onshore private bond for three years.
The vote was postponed twice before Country Garden’s proposal received support from 56.08% of participating creditors. It made a last-minute bond coupon payment last week, also avoiding a default in the offshore market.
Country Garden bondholders are scheduled to vote separately on Monday on a proposal to extend the maturities of eight land bonds issued by the developer and its subsidiaries that were scheduled to mature in 2023 and 2024.
Country Garden did not immediately respond to a request for comment.
Country Garden, one of the few major Chinese developers not to default on its debts, faces liquidity pressures as sales plummet, reducing available funds, interim financial statements show. has been done.
The company had 108.7 billion yuan ($14.9 billion) worth of debt due within 12 months, but had cash levels of about 101.1 billion yuan at the end of June, according to its interim financial report.
In the offshore market, Country Garden has at least five coupon payments due this month, including two relatively large dollar bonds worth $15 million due September 17th and a September 27th bond due September 27th. It includes two tickets worth $40 million that are due, each with a 30-day grace period.
If Country Garden defaults on its debts, it could further worsen the country’s real estate crisis, further stressing struggling banks and delaying the recovery of not only the real estate market but the Chinese economy as a whole. .
Risk of infectious diseases
Country Garden has so far shown a “higher appetite to avoid default” than many of its peers, said Nicholas Cheng, an analyst at Singapore-based research firm CreditSights.
Chen said he expects Country Garden to continue its efforts to defer bond payments in both onshore and offshore markets, adding that it expects “potential contagion to other upstream and downstream sectors, as well as various local governments.” “Chinese regulators are likely to be involved with the developer,” he said.
Chinese authorities have launched a number of support measures in recent weeks for the heavily indebted real estate sector, including lower interest rates on existing mortgages and preferential loans for first home buyers in big cities.
The real estate sector accounts for about a quarter of China’s economy, and the recovery is critical to Beijing’s plans to foster rapid growth in the world’s second-largest economy.
New bank lending in China nearly quadrupled from July levels in August, official data released on Monday showed, as the People’s Bank of China seeks to boost economic growth against the backdrop of weak demand at home and abroad. , exceeded expectations.
Chinese stocks rose on Monday, supported by new government policies to boost investor confidence, but real estate sector stocks fell. Country Garden’s stock price fell 7.5% ahead of the vote.
(1 dollar = 7.3490 Chinese Yuan)
Report by Xie Yu. Edited by Sumeet Chatterjee and Lincoln Feast.
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