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Bond Market News
COGARD Suspends Trading of Onshore Bonds
August 14, 2023
Country Garden (COGARD) has suspended trading of at least 10 of its onshore bonds and is exploring options for its local bonds, as per Bloomberg. Its options include extending maturities, with the developer saying that it will take powerful and effective measures to ensure delivery of homes and to address periodic liquidity stress. COGARD only last week missed paying coupons on its dollar bonds for which a 30-day grace period has been triggered. Earlier this month, it warned of an over $6bn loss in 1H 2023 due to a decrease in gross profit margins for its real estate business and an increase in impairment provisions for property projects.
The Chinese property sector is hoping for a larger stimulus to overcome its financial and liquidity challenges. With COGARD’s dollar bonds at distressed levels, even investment grade-rated developers like Longfor Group has seen its dollar bonds drop to ~60 cents on the dollar. The extent of support and the ability to avert a much larger fallout in the sector remains to be seen.
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