Country Garden (2007.HK) warned on Tuesday about its inability to meet offshore debt obligations, potentially joining a growing list of Chinese developers that have defaulted and setting the stage for one of the country’s biggest debt restructurings.
Companies accounting for 40% of Chinese home sales – mostly private property developers – have defaulted on debt obligations since a liquidity crisis hit the sector in 2021, leaving many homes unfinished.
Country Garden, China’s largest private property developer, has not defaulted so far, but has missed coupon payments on some dollar bonds since last month and faces the end of 30-day grace periods for making payments from next week.
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