Chinese developer Country Garden defaults on dollar bond
Country Garden Holdings Co. was deemed to be in default on a dollar bond for the first time ever, underscoring its fall into distress amid a broader property debt crisis that's shaken the world's second-biggest economy.
Country Garden's failure to pay interest on the note within a grace period that ended last week «constitutes an event of default,» according to a notice to holders from trustee Citicorp International Ltd. seen by Bloomberg News.
That means that the trustee must declare principal and interest due immediately if holders of at least 25% in aggregate principal amount of the notes outstanding demand it. There is no indication that creditors have made any such demand yet.
The builder, among the world's most indebted developers, didn't pay $15.4 million of dollar bond interest by the end of a 30-day grace period after missing the initial deadline of Sept. 17.
A default had appeared all but official after Country Garden told Bloomberg News last week that it didn't expect to be able to meet all offshore payment obligations on time. The company is now likely headed for what would be one of the nation's biggest-ever restructurings. A spokesperson for Citigroup declined to comment about the trustee notice to Country Garden bondholders.
Read more on economictimes.indiatimes.com
