Country Garden (2007) said it will suspend trading in 11 onshore bonds issued by the developer and its subsidiaries from today after its top executives apologized in a public notice and promised to ensure the project deliveries and resolve the existing liquidity crisis.
The yuan-denominated corporate bonds, one issued by itself, nine by Country Garden Real Estate Group, and another by Guangdong Giant Leap Construction, both its units, will be suspended from trading effective at the market opening, according to a filing yesterday.
The total principal and interests of the bonds, which will be due or with a repurchase option before June 2024, amounts to 15.7 billion yuan (HK$16.96 billion), Caixin reported.
Among them, the 3.9-billion-yuan private placement bond issued by Country Garden in 2016 will be due next month. The Foshan-based company missed two coupon payments totaling US$22.5 million (HK$175.5 million) last week, though there is a 30-day grace period.
The three firms together had outstanding bonds of 94.6 billion yuan as of yesterday, of which, offshore debts were worth 72.1 billion yuan and onshore 22.5 billion yuan, according to Caixin.
The firms said they are planning to hold meetings with bondholders on repayment arrangements shortly, reiterating they will take measures to defuse risks and protect the legitimate rights of its investors while ensuring home deliveries.
The suspensions came after Country Garden's chairman Yang Huiyan and president Mo Bin apologized in a WeChat statement on Friday, in which they said the developer will "make sure it doesn't lie flat" and will "think of every possible way to rescue itself" through sales, tapping into assets and enlisting support from shareholders.
Its shares slumped as much as 14 percent Friday before closing below HK$1 for the first time ever. On Thursday night, the developer warned of a first-half net loss of up to 55 billion yuan from a profit of 1.91 billion yuan a year ago.
Meanwhile, a new media unit under the state-owned Securities Times said further easing of property market regulations will be announced as soon as the end of this month.
The report cited a brokerage that purchase restrictions in the suburbs of first-tier cities including Beijing and Shenzhen may be removed and depending on the effect of the relaxation, the follow-up stimulus policy might be introduced at the end of October, with a target to boost both the transaction volume and price there while limiting the rise in prices to up to 5 percent.
It added the mortgage rates for existing mortgages might be cut from the fourth quarter but the effect of the policy might vary from region to region due to the difficulty of coordination and the lack of motivation from banks.
