By HUANG Yu
Property developer Country Garden, until recently the biggest in China, has been unable to pay interest on two US dollar bonds that were due on Monday.
A US$500 million bond with a 4.2 percent coupon and another with a 4.8 percent coupon were on August 6.
Country Garden has claimed a 30-day grace period for the payments and is working to find the funds.
Due to poor sales and refinancing, coupled with regulatory measures, the company is almost completely without liquidity.
In 2022, Country Garden delivered nearly 700,000 homes, and it is expected to deliver another 700,000 this year. In the first half of the year, the company completed only 278,000 deliveries, maintaining its lead in that respect, with no cases of overdue delivery.
Country Garden has paid both principal and interest on a bond due on August 10, with 1.4 billion yuan outstanding, on a coupon of 4.19 percent. Since July, the company's stock price and domestic corporate bond prices have both sunk.
The company expected to record a loss in H1. Although profit also declined in the first half of 2022. Due to reduced margins, FX losses and provision for asset impairment, the developer made a loss last year.
