China’s Country Garden: Navigating the Impending Offshore Debt Default

China’s largest private property developer, Country Garden Holdings, is close to defaulting on its $11 billion overseas debt but is yet to make a coupon payment to bond investors. This would be the latest in a series of Chinese developers defaulting, causing a crisis in the property sector, which makes up about a quarter of the world’s second-largest economy.

If Country Garden fails to make a $15 million payment for a September 2025 bond by midnight in New York, it will be considered in default. The company has warned of its inability to meet offshore debt obligations. The latest indicator of the struggling Chinese property market will be published on Wednesday, with nationwide prices of new homes for September released on Thursday.

Country Garden, a Chinese company with $11 billion of offshore bonds and $6 billion of onshore loans, could face a default, paving the way for one of China’s largest corporate debt restructurings.
The company has missed other offshore payments, but their 30-day grace periods have not expired. A default would allow offshore creditors to negotiate with the firm’s financial advisors for a restructuring process that could take months due to the debt’s scale. A CreditSights report suggests that state-linked developers can still access funding markets, while private firms are struggling to source new capital.

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