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(Updates headline, payment not having been made in paragraph 7)
By Clare Jim and Xie Yu
HONG KONG, Oct 17 (Reuters) - Country Garden's entire offshore debt will be deemed to be in default if China's largest private property developer fails to make a $15 million coupon payment on Tuesday, the end of a 30-day grace period.
Non-payment of this tranche is set to trigger cross defaults in other bonds as is standard in bond contracts.
With nearly $11 billion of offshore bonds and $6 billion of offshore loans, a default by Country Garden would set the stage for one of China's biggest corporate debt restructurings, as the country's property sector crisis deepens and drags on economic growth.
"I think it’s a really high-profile and visceral reminder of just how bad things are for the developers, but the private-sector developers in particular," said Chris Beddor, deputy director of China Research at Gavekal Dragonomics.
Lack of payment - which is expected after Country Garden warned last week about its inability to meet offshore debt obligations - would make the firm the latest in scores of Chinese developers who have defaulted.
Country Garden has also missed other offshore payments in the past few weeks, though those payments still have not seen their 30-day grace periods lapse.
A source familiar with the situation told Reuters the coupon payment had not been made by 1400 GMT.
Country Garden declined to comment.
In a fresh reminder of just how nervous investors have become about the crisis in the sector, another major property developer Gemdale saw its stocks and bonds plunge on Tuesday after the resignation of its chairman.
Gemdale said the resignation was due to health reasons but investors, spooked by the sector's broader problems, were taking no chances and rushed to sell its securities, analysts said.
Three of its bonds lost more than a fifth of their value before their trade was suspended and its stock tumbled 9%.
Moody's downgraded Gemdale to B3 from Ba3 with a negative outlook on Tuesday, while Fitch downgraded state-backed China Vanke and state-owned Poly Developments and Holdings to BBB from BBB+, citing higher leverage.
Fitch added China Vanke's recent sales performance was weaker than expected, which could dampen cash generation and its deleveraging effort.
In mainland China, Evergrande Group, which is in the centre of the debt crisis, said on Monday it will hold a bondholder meeting on Wednesday and Thursday to approve a plan to delay the buyback date for a 2.1 billion yuan ($287.11 million) puttable bond by one year to Oct 2024.