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Distressed Chinese developer Country Garden’s (COGARD), which missed coupon payments earlier this month is now causing some confusion regarding the exact deadline to its grace period. COGARD missed $22.5mn in coupon payments on two of its dollar bonds – its 4.2% 2026s and 4.8% 2030s. A 30-day grace period was triggered upon the non-payment of coupons. The due date of the coupons was August 6, a Sunday and thus the effective payment date was the next business day, August 7, a Monday. Questions have now risen regarding the exact end date of the grace period including from rating agency Moody’s.
Separately, Fitch cut Country Garden Services’ rating from BBB- to BB+. Fitch noted that the downgrade came on the back of its “growth, brand reputation, profitability and funding access” likely being negatively affected by heightened liquidity pressure at its sister company Country Garden Holdings.
COGARD’s dollar bonds are trading at deeply distressed levels of ~7 cents on the dollar.
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