Dollar bonds of Country Garden (COGARD) and Sino-Ocean dropped by over 3-5 points across the curve, continuing their fall since yesterday. This comes on the back of renewed fears over the property sector. Li Kai, CIO of Beijing Shengao Fund Management said that COGARD, whose bonds have better liquidity, are more exposed to the weakness following headlines about property firms led by Dalian Wanda. Earlier this week, Dalian Wanda’s dollar bonds fell by over 5% on concerns about the company extending all of its onshore trust loans. Yesterday, COGARD was hit by concerns over possible refinancing difficulties despite the company falling within the three red-lines limits. Its Liabilities/Assets (ex-advanced proceeds) ratio is at 38%, Net-debt/Equity is at 42.6% and Short-term Debt/Cash is at 73%. The caps set by the government are: Liabilities/assets (ex-advanced proceeds) not more than 70%, Net-Debt/Equity not more than 100% and Short-term Debt/Cash of lesser than 100%.
COGARD’s 2026s are now trading at 53 cents on the dollar, down ~10% this month. Sino-Ocean’s 2026s have been impacted even more, down ~30% MTD to 35 cents on the dollar
