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Bond Market News
Country Garden Seeks State Guarantor Help to Pay Local Bonds Coupons
May 9, 2024
Country Garden (COGARD) has asked the help of state guarantor China Bond Insurance Co. that guarantees local developer bonds to pay coupons on two local notes. The coupons on two of its local bonds due 2025, totalling to RMB 65.95mn ($9.1mn) are due today, May 9. The Chinese authorities had introduced a program in 2022 to help private developers raise money by having China Bond Insurance Co. act as a guarantor, and thereby ease liquidity strain. As per Bloomberg, none of the builders that have used the state guarantee program have missed payments on their guaranteed securities. If coupon payments are not made, a 5-day grace period gets triggered before default event occurs.
Country Garden’s dollar bonds are at deeply distressed levels of ~6 cents on the dollar
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