Country Garden Enters Final Hours to Avoid First Bond Default

  • The clock is ticking for Country Garden Holdings Co. to avert its first-ever public dollar bond default, as the distressed Chinese developer faces an interest-payment deadline this week.
  • The builder, which has become a symbol of China’s broader property debt crisis, must pay a $15.4 million coupon by the end of a 30-day grace period Oct. 17-18 before a default can be called.
  • With $187 billion of total liabilities as of June 30, Country Garden is one of the world’s most indebted builders and will face another test on Oct. 27, when the grace period for a $40 million coupon on another dollar bond ends.
  • An eventual default wouldn’t come as a surprise, given the developer’s dollar bonds are trading at deeply distressed levels around 4-6 cents on the dollar, indicating investors’ low expectations for debt recovery.

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