This site uses cookies to provide you with a great user experience. By using BondbloX, you accept our use of cookies.
Country Garden (COGARD) was downgraded to Caa1 from B1 and its senior unsecured debt was downgraded to Caa2 from B1. The downgrade reflects Country Garden’s heightened liquidity and refinancing risks. This comes especially after concerns about its ability to service its debt obligations, including coupons, in a timely manner over the next 6-12 months. This comes after COGARD missed paying coupons on two of its dollar bonds that has now triggered a 30-day grace period to remediate the coupon payments. COGARD has ~RMB 17bn ($2.4bn) of onshore bonds and around $1.9bn of offshore bonds due or becoming puttable through end-2024. Its senior unsecured ratings were downgraded due to increased structural subordination risk. COGARD, in an HKEX filing said that it anticipates posting a net loss of RMB 45-55bn ($6.2-7.6bn), vs. profits of RMB 1.91bn ($270mn) in 1H 2022. Moody’s expects Country Garden’s credit metrics to weaken over the next 12-18 months, with its EBIT/interest coverage falling to 1.5-2.0x from 3.1x in 2022. Its debt/EBITDA is also expected to rise above 9.0x from 5.4x over the same period.
COGARD’s dollar bonds were lower with its 8% 2024s down 1.7 points to just 10.5 cents on the dollar.
To read more, click here