Amidst financial challenges, Chinese developer Country Garden has successfully obtained an extension for the last of eight onshore bonds, breathing relief into its precarious situation. This final bond, valued at 492 million yuan ($67 million), had faced multiple delays in the voting process before creditors finally voted in favour of extending its maturity by three years. The agreement also includes a significant guarantee of no less than 200 million yuan from the bond issuer, Guangdong Giant Leap Construction Co. Country Garden's efforts to extend the maturities of these bonds reflect the ongoing turbulence in the Chinese property sector.
In Hong Kong, the troubled Chinese developer Country Garden has received creditor approval to prolong the repayment period for another onshore bond, marking the final bond out of eight that the company has sought extensions for. The 492 million yuan ($67 million) onshore bond was initially issued by a subsidiary of Country Garden, and the company had postponed the vote on this bond three times. However, on Monday, creditors voted in favour of extending the bond's maturity.
The sources, who preferred to remain anonymous due to a lack of authorization to speak with the media, indicated that the bond's maturity has been extended by a duration of three years. According to the terms of the agreement, the issuer, Guangdong Giant Leap Construction Co, would furnish a pledged guarantee for the bond amounting to no less than 200 million yuan, as per the information provided by the two sources.
Previously, Country Garden, whose financial difficulties have had an impact on the Chinese property sector's outlook, had proposed extending the maturities of eight onshore bonds totalling 10.8 billion yuan by three years. Creditors approved the plans for seven of these bonds last week.
A bond is a financial instrument issued by a company, government, or other entities to raise capital. When you buy a bond, you are essentially lending money to the issuer for a specified period. In return, the issuer promises to pay you periodic interest payments (known as coupon payments) and return the principal amount (the initial amount you invested) when the bond matures.
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