Country Garden to Suspend Trading of at Least 10 Onshore Bonds

Country Garden Real Estate Group Co Ltd. said it will suspend trading in nearly a dozen onshore bonds starting Monday, two days after the Chinese real estate company’s controlling shareholder said it would report a multi-billion-dollar loss for the first half of this year.

(Bloomberg) — Country Garden Real Estate Group Co Ltd. said it will suspend trading in nearly a dozen onshore bonds starting Monday, two days after the Chinese real estate company’s controlling shareholder said it would report a multi-billion-dollar loss for the first half of this year.

Six yuan-denominated corporate bonds issued in 2021 and 2022 will be suspended from trading effective at the market opening, the company, formerly China’s largest developer by sales, said in filings to Shenzhen Stock Exchange Saturday night.

Three additional corporate bonds will also be subject to suspension on Shanghai Stock Exchange, according to filings on the Chinese bourse. Guangdong Tengyue Construction Engineering Co., a subsidiary of Country Garden Holdings Co., Country Garden Real Estate Group’s controlling holder, made the same decision on one bond. Local media said a Country Garden private placement bond will be suspended as well.

Representatives of Chinese bank CICC told some Country Garden noteholders that its bond-underwriting team has been engaged to explore options for the builder’s yuan-note maturities, Bloomberg reported Friday. The struggling builder is considering extending some soon-to-mature notes, according to people who were involved in the private conversations.

The developments come after China’s sixth-largest developer said in a Hong Kong exchange filing Thursday night that it anticipates posting a net loss of 45 billion to 55 billion yuan ($6.2 billion to $7.6 billion), compared with earnings of 1.91 billion yuan in the first half of 2022. 

Country Garden apologized Friday, vowing the firm will take more powerful and effective measures to ensure home delivery and to address periodic liquidity stress, Chairwoman Yang Huiyan and President Mo Bin say in a WeChat statement to investors and clients. 

In the statement Saturday, the company said it’s planning to hold meetings with bondholders on the repayment arrangements in the near future. It reiterated it will take measures to defuse risks and protect the legitimate rights of its investors while ensuring home deliveries.

Bonds and shares of Country Garden Holdings Co. have plunged this week after bondholders failed to receive coupon payments of two dollar notes by an initial deadline, raising concern it will be the next property giant to default. 

The company’s shares fell as much as 14% Friday in Hong Kong before closing below HK$1 for the first time ever. It has tumbled 63% this year, the worst performer on Hang Seng Index. 

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