Country Garden Bondholders Approve Delays on Yuan Bond Payments

Country Garden Holdings Co., one of China's largest property developers, has secured bondholders' approval to extend payments on several of its yuan bonds. This development comes amidst the company's ongoing financial stress and efforts to restructure its debt.

Country Garden's sales have plummeted by 78% in the first eight months of the year, more than double the decline seen by the nation's top 100 property firms. This sharp slowdown, coupled with a prolonged sales slump, has exacerbated the developer's financial strain. In response, Country Garden sought and obtained approval to push back payments on nine of its yuan bonds by six months, providing the company with additional time to work on a comprehensive debt overhaul.

The payment delays offer Country Garden some much-needed breathing room as it seeks to draw up a fresh restructuring plan. However, onshore bondholders will now have to wait longer to recoup part of their losses from the defaulted developer. Country Garden's offshore restructuring talks also continue, with a liquidation hearing adjourned until late January.

The payment extensions come as Country Garden faces a challenging market environment and regulatory changes. The company's focus on smaller cities has contributed to its sharper slowdown compared to its peers. Furthermore, the ongoing housing slump in China has added to the developer's financial stress.


The bond payment delays have potential implications for Country Garden's creditors, investors, and the broader Chinese property sector. While the extensions provide the developer with more time to address its financial woes, they also prolong the uncertainty faced by bondholders. The delays may also impact the broader market sentiment towards Chinese property developers and their bonds, potentially influencing the decision-making process of other bondholders and creditors in the sector.

In conclusion, Country Garden's bond payment delays reflect the company's ongoing financial stress and efforts to restructure its debt. While the extensions offer the developer some breathing room, they also prolong uncertainty for bondholders and may impact market sentiment towards the Chinese property sector. As Country Garden continues its debt restructuring efforts, both onshore and offshore, the outcome will have significant implications for the company, its creditors, and the broader market.