Serrari Group

In a bid to manage mounting financial pressures, Country Garden, one of China’s largest private property developers, has formally requested a 40-day extension on the repayment of a renminbi bond that is set to mature in the upcoming week. This development underscores the growing distress within the Chinese real estate sector. The request, which arrives just a day before the release of Country Garden’s first-half financial results, highlights the increasing financial challenges faced by the sector despite recent assurances of heightened support from top officials aimed at stabilizing the industry.

Amidst a backdrop of missed payments on dollar bond obligations and a lack of substantial stimulus to rescue the struggling sector, shares of developers listed on the Hong Kong Stock Exchange have witnessed a significant downturn of approximately one-third this year. The absence of concrete measures to alleviate the challenges has put substantial downward pressure on these developers’ stock prices.

China’s real estate giant China Evergrande exemplified the sector’s liquidity crisis when its shares plummeted by nearly 90% upon resuming trading after a 17-month hiatus. This downturn coincided with the postponement of a pivotal restructuring meeting with creditors.

Country Garden, burdened with liabilities amounting to nearly $200 billion, is seeking consent from its creditors to extend the maturity date of a bond with an outstanding principal of Rmb3.9 billion ($530 million), which is due on September 4th. A voting session to decide on this extension will be convened no later than August 31st, as outlined in a confidential communication to investors via the Shanghai Stock Exchange.

The situation is particularly noteworthy given that Country Garden was once regarded as one of the least likely Chinese developers to default. However, recent events have altered this perception as the company missed interest payments totaling $22.5 million on two international bonds of $500 million each earlier this month.

Market analysts have pointed out that while offshore obligations may be of concern, the central government has taken a more serious stance on onshore obligations. Creditors, therefore, are anticipated to feel compelled to approve the extension of the renminbi bond’s maturity date.

A bond trader based in Hong Kong noted, “The bondholders don’t want Country Garden to default, they want to discuss better terms, but they couldn’t get 50 percent approval for a full extension, so they have to go for a grace period.” Despite potential approval, traders caution that this action merely delays the underlying issue.

News of the extension request, initially reported by Bloomberg, led to a temporary uptick of around 9% in Country Garden’s shares during afternoon trading in Hong Kong. However, the company’s stock value remains down by approximately 50% this year, equating to a loss of approximately $17 billion in market capitalization.

Meanwhile, Country Garden Services, the developer’s real estate management affiliate, disclosed a year-on-year profit decrease of 11% to Rmb2.35 billion in its first-half results released on Tuesday.

With investor attention now focused on early September, when the grace period for the previously missed payments on international bonds will lapse, uncertainties loom. The question remains whether Country Garden will be able to meet its obligations concerning these dollar-denominated bonds.

As the situation unfolds, market participants closely monitor the evolving developments within the Chinese real estate sector, which continues to grapple with unprecedented challenges and uncertainties.

Photo Source: Google

August 30, 2023

By: Delino Gayweh

Serrari Financial Analyst

Share this article:
Article and News Disclaimer

The information provided on is for general informational purposes only. While we strive to keep the information up to date and accurate, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk. is not responsible for any errors or omissions, or for the results obtained from the use of this information. All information on the website is provided on an "as-is" basis, with no guarantee of completeness, accuracy, timeliness, or of the results obtained from the use of this information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

In no event will be liable to you or anyone else for any decision made or action taken in reliance on the information provided on the website or for any consequential, special, or similar damages, even if advised of the possibility of such damages.

The articles, news, and information presented on reflect the opinions of the respective authors and contributors and do not necessarily represent the views of the website or its management. Any views or opinions expressed are solely those of the individual authors and do not represent the website's views or opinions as a whole.

The content on may include links to external websites, which are provided for convenience and informational purposes only. We have no control over the nature, content, and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorsement of the views expressed within them.

Every effort is made to keep the website up and running smoothly. However, takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.

Please note that laws, regulations, and information can change rapidly, and we advise you to conduct further research and seek professional advice when necessary.

By using, you agree to this disclaimer and its terms. If you do not agree with this disclaimer, please do not use the website., reserves the right to update, modify, or remove any part of this disclaimer without prior notice. It is your responsibility to review this disclaimer periodically for changes.

Serrari Group 2023