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Bond Market News
Country Garden Proposes Extension of Bond Maturity on Local Bond
August 15, 2023
Country Garden (COGARD) is seeking proposals for maturity extension of a RMB 3.9bn ($537mn) bond payment due on September 2. The Chinese real estate developer is proposing to extend the bond with amortized disbursements over 36 months as per Bloomberg. This comes just days after COGARD had suspended trading of its onshore notes. While the company is yet to default on its offshore notes, the clock is ticking after it missed a coupon payment on August 7.
COGARD has RMB 1.4tn of total liabilities and employed around 70,000 people as at the end of last year. Given the worsening liquidity position of COGARD given its large size (largest developer by sales), there is contagion risk across the sector and to the wider economy. In related news, one of the nation’s top private wealth managers, Zhongzhi Enterprise Group Co., which manages about RMB 1tn of assets, missed payments on multiple high-yield investment products. The Chinese banking regulator has set up a task force to examine the risks at the firm, raising fresh concerns about trust firms with exposure to real estate projects.
Monday saw another round of selling in Chinese developers’ bonds led by Longfor’s bonds down as much as 7 points to 50-60 levels.
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