China’s Country Garden Holdings, one of China’s largest private-sector property developers, is late on delivering coupon payments on its debt, sparking fears the company could soon default. The company failed to pay coupon payments due Monday. Country Garden Holdings owes $10.5 million of interest on a dollar bond that matures in 2026 and $12 million on a note due in 2030. That puts the firm, which had 1.4 trillion yuan ($199 billion) of total liabilities at the end of last year, on course for its first public default if it doesn’t make the payments within a 30-day grace period.
A default at Country Garden Holdings could be worse than China Evergrande Group’s default in late 2021. Country Garden Holdings, formerly China’s largest private-sector developer by sales, is the builder of more than 3,000 housing projects in smaller Chinese cities and employed about 70,000 people at the end of last year. It has so far avoided the liquidity crunch that has hammered China’s property developers, but falling home sales and soaring refinancing costs put the company in danger of being caught up in the property debt crisis.
