Country Garden Holdings Co. missed a coupon payment on a yuan bond for the first time, according to people familiar with the matter, adding to the woes of the Chinese developer that is now facing a lawsuit seeking its liquidation offshore.
The builder’s main onshore unit hasn’t paid a 96 million yuan ($13 million) coupon that came due on Tuesday for a 4.8% yuan bond maturing in 2026, said the people, who asked not to be identified, citing disclosure rules. There is a 30 trading-day grace period for the payment, before any default could be called, the people added.
Country Garden roiled markets when it defaulted on its dollar debt in October, but has so far managed to avoid doing so on its local-currency obligations. In September, the developer extended more than 10 billion yuan of yuan bonds by three years. After that, it paid several coupons and in December paid off an 800 million yuan note.
Country Garden didn’t immediately offer a comment when reached. Mainland media outlet The Paper reported the missed payment earlier.
Country Garden’s crisis entered a new chapter after a Hong Kong court last month received a creditor’s petition to wind up the Guangdong-based company.
A sales drought for the builder has worsened. Contract sales for February plunged 85% from a year earlier, widening from a 75% slide in January, corporate filings show.
Homebuyers in China are avoiding defaulted developers on concerns about their ability to complete housing projects. Now the focus is turning to China Vanke Co., a state-backed builder that is in talks with creditors to stave off a default. – Bloomberg
