Country Garden, the embattled Chinese real estate firm, made late interest payments on two US dollar bonds shortly before the end of a 30-day grace period, avoiding an imminent debt default, according to multiple state media reports.
The China Securities Journal reported on Tuesday that the company had paid the overdue interest of $22.5 million on the bonds, citing people close to the company. That means the property giant has been able to avoid defaulting on two of its dollar bonds this week, fueling optimism among some investors that the debt-laden company may be able to find enough cash to see it through the country’s real estate crisis.
It closed down 1% in Hong Kong. The stock has lost 62% this year. Making the crucial payments doesn’t mean the company is out of the woods yet. It posted a loss of $7 billion in the first six months of the year and still faces a number of other debt deadlines. The company has nearly $200 billion in total liabilities and faces mounting pressure to pay off those debts. It has about 31 billion yuan in bonds set to mature through the end of 2024, according to Moody’s.
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