Yahoo Finance Country Garden pays yuan bond just weeks after dollar default
By Jackie Cai
(Bloomberg) — Chinese developer Country Garden Holdings Co., which defaulted on dollar bonds in October, paid off a yuan note in full Wednesday, the same day that a top housing official said the nation would avoid a cascade of missed debt payments by property firms.
The builder’s onshore unit, Country Garden Real Estate Group Co., repaid in full the 800 million yuan ($111 million) security with a put option that expired Wednesday, it said in a filing to the Shenzhen Stock Exchange. Bloomberg News had reported earlier that company representatives told investors it had remitted funds to repay the outstanding principal and interest.
Country Garden, among the world’s most indebted developers, didn’t say how it came up with the money. Investors in China’s troubled property firms have been left trying to gauge the level of financial support from authorities, after months of policy steps to prevent an industry debt crisis that’s headed into its fourth year from sparking worse contagion. Earlier on Wednesday, Dong Jianguo, Vice Minister of Housing and Urban-Rural Development, said that China would “forcefully prevent developers from defaulting on their debts all at once.”
Country Garden was included in a draft list of 50 developers eligible for a range of financing support, people familiar with the matter said last month. The builder, whose liquidity crunch shook the nation’s financial markets earlier this year, has yet to default on any local notes.
Helmed by one of China’s richest women, Yang Huiyan, Country Garden’s sheer size has made it important to the economy, where the property market along with related industries accounts for about 20% of gross domestic product. Along with China Evergrande Group, whose default in 2021 opened the door to record nonpayments from other builders, it has come to symbolize the nation’s broader real estate crisis.
China has rolled out fresh measures to strengthen developers, adding to a slew of moves over the past year mostly aimed at stoking demand for homes. Such steps have largely failed, with home sales plunging in 18 of the past 22 months. Buyers remain on the sidelines, spooked by construction delays, falling prices and company defaults.
—With assistance from Philip Glamann.
©2023 Bloomberg L.P.
