Country Garden, one of China’s top property developers, saw a sell-off in its bonds and stocks amid renewed market concerns about its liquidity.
The 2.7% US dollar bond due 2026 tumbled by as much as 12% to 20.53 cents, hitting the lowest level since November 11 last year. In the onshore bond market, several bonds of the developer tumbled about 30%.
The property developer’s Hong Kong-traded stocks fell by more than 6% to hit a low of HK$1.37.
Country Garden said on Thursday it reached agreements with various financial institutions to refinance part of a 2019 loan facility it had borrowed from them, fuelling market concerns about its financial health.
China’s real estate sector has entered its longest downtrend in the past two decades and the worst may not be over with dollar-denominated bond repayments of $12.8 billion coming due before the end of the year, ANZ estimated.
“New measures, while helpful, are no panacea for the sector’s woes. Other efforts are needed to boost buyers’ sentiment about the long-term trajectory of the property market,” it said.
JPMorgan said Country Garden’s loan refinancing was “marginally credit positive” as a large part of the outstanding amount was being rolled into a new 30-month term instead of facing immediate repayment.
“That said, the onshore operating environment remains challenging for the developers, especially with no indication of relaxation of escrow account supervision,” it said.
Separately, Country Garden said in a statement on Friday that the company has always proritized the completion of the mission of ensuring home deliveries and improving people’s livelihoods.Â
In 2022, the company delivered a total of 1,384 batches of properties in 255 cities, with a total of nearly 700,000 homes delivered and so far this year, it plans to deliver an additional 700,000 homes, with 278,000 homes delivered in the first half of the year, ranking first in the industry in terms of delivery volume, it said.
