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Country Garden (COGARD) was declared to be in default for the first time in its history, as per a notice to holders from trustee Citicorp International Ltd. The missed coupon payment of $15mn on its 6.15% 2025s “constitutes an event of default”, the note said. As per Bloomberg, the default would imply that the trustee must declare principal and interest due immediately if holders of at least 25% of the holders demand it. However, there has been no indication of such a demand yet, they added. There was a lack of clarity initially on whether the missed coupon was confirmed and if it amounted to a default. COGARD recently hired advisers to review its capital structure amid signs of a debt restructuring. The trustee notice may also help determine whether the developer’s missed coupon payment would trigger CDS related to its bonds. While COGARD has defaulted on its dollar bonds, it has yet to default on any of its local bonds. It recently won approval to extend payments on RMB 14.7bn ($2bn) of nine onshore notes.
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