Buckle up, folks! There’s a twist in the tale for Chinese bigwig developer, Country Garden. After missing a couple of dollar payment deadlines last month, they’re back on the hot seat. Come Monday, they’re looking at coughing up a cool $66.8 million.
So, what’s the story? These big payments are linked to two of their bonds, one from April 2024 and the other from 2026. Now, they do have a tiny breather with a 30-day grace period, but the clock’s ticking. By October 17, if they don’t settle a $15 million bill from September, they’re in deep water. Their entire offshore debt might tumble into default. Yikes!
Put it in numbers? Country Garden’s got debt hanging over them like a dark cloud: almost $11 billion offshore and another whopping 42.4 billion yuan (around $5.81 billion) in loans. And if they trip and fall into default? Well, they’d have to shake things up big time. We’re talking restructuring, and they might even risk some of their precious assets being snatched away by the money folks.
Here’s the bigger picture: China’s property game has been shaky since 2021. A whooping 40% of the home sales – a huge chunk by private developers – have run into money troubles. That’s left a bunch of homes hanging mid-air, unfinished.
Fast forward, and the crisis is like a pot of water on the boil. The trust in housing? Vanished. The money markets? Dry as a bone. This squeeze is making things super tight for developers.
Now, China’s big bosses in Beijing have been trying to patch things up, rolling out all sorts of plans. They’re trying to breathe life into a sector that’s a big slice of China’s pie. But, word on the street is, they need to up their game even more.
UBS piped in recently, hinting that even with all these helping hands, things aren’t looking up. Sales in the big cities? Still in the doldrums.
Eyes are now glued on Country Garden. They’ve got projects dotted all over, and folks are biting their nails, wondering if they’ll pull a last-minute save like before. Last month, they managed to stretch some payments and just in the nick of time, settled some offshore bills.
But there’s still a pair of payments dangling – one for $15 million and another for $40 million. Both have that 30-day cushion. But will they make it?
Oh boy, the suspense is real! So, grab your popcorn and stay tuned. This saga’s far from over!