Chinese real estate developer, Country Garden Holdings, has officially defaulted on a U.S. dollar-denominated bond for the first time, citing a formal notice.
The default occurred following Country Garden’s failure to meet the interest payment deadline on the bond within the grace period, which concluded last week. This non-payment has been declared as an “event of default,” according to the notice issued to bondholders by a trustee.
Country Garden has not yet responded to inquiries by Reuters as of Wednesday.
The grace period, which lapsed last Wednesday, was associated with a $15 million coupon payment due on a bond set to mature in September 2025. Notably, two bondholders confirmed to Reuters that they did not receive the expected funds as the specified deadline expired.
This default has placed Country Garden at considerable risk of defaulting on its substantial outstanding offshore bond debt, amounting to nearly $11 billion. Such a scenario could potentially incite one of China’s most significant corporate debt restructuring efforts.
In response to this critical situation, a consortium of investors holding approximately $2 billion worth of Country Garden’s offshore bonds has enlisted the services of PJT Partners (NYSE:PJT) as their financial adviser. PJT Partners is set to spearhead discussions with Country Garden regarding prospective debt restructuring plans, as previously reported by Reuters.
