Embattled Chinese property developer Country Garden faces yet another liquidity test with Monday’s deadline to pay $15 million in interest linked to an offshore bond, after having dodged default at the last minute twice this month. Country Garden, whose financial woes have worsened the property sector outlook and spurred a raft of support measures from Beijing, will have a 30-day grace period to pay the coupon before it is considered in default.
The $500-million, 6.15% bond matures in Sept. 2025. The coupon payment had not been received by late afternoon on Monday, said one holder of the bond tranche, who sought anonymity as they were not authorised to speak to media. If Country Garden fails to pay the coupon before the grace period ends in mid-October, the principal will become due and any failure to service will trigger cross-default terms, said Sandra Chow, co-head of Asia-Pacific research at CreditSights.
