Each account pays 100000 yuan in advance, and Country Garden's first extended bond plan is released: principal extension for three years Country Garden | plan | extension
On August 18th, Country Garden's wholly-owned subsidiary Country Garden Real Estate Group Co., Ltd. released an extension plan for its bond "16 Country Garden 05", which is Country Garden's first bond seeking an extension.
"16 Country Garden 05" is a private equity bond with a maturity date of September 2 this year and a balance of 3.904 billion yuan. The issuer of the bond is Country Garden Real Estate Group Co., Ltd.
Previously, some investors stated that they had communicated with Country Garden about an extension plan. The issuer's proposed plan was to pay interest on the debt when it matures and extend the principal for three years. Pay 2% of the principal in the first, second, and third months after maturity, and 10% of the principal in the twelfth month; Pay 15% of the principal in the 24th month, 25% in the 30th month, and the remaining 44% in the 36th month.
At the same time as the extension, the credit enhancement measures provided by Country Garden in its previous plan included providing pledge guarantees for the equity income rights of projects in Longyan, Fujian, Yantai, Shandong, and Shuyang, Huai'an, and Xinghua in Jiangsu. The plan announced this time involves Country Garden replacing some of its credit enhancement assets. The following five projects provide credit enhancement measures, including 94.45% equity return rights of the project company affiliated with the Longyan Jinhu Source Project after penetration, 85% equity return rights of the project company affiliated with the Shuyang Yunyue East Project after penetration, 90% equity return rights of the project company affiliated with the Haiyang Shili Jintan Project after penetration, 100% equity return rights of the project company affiliated with the Huai'an Chuzhou Yin Project after penetration, and 100% equity return rights of the project company affiliated with the Xinghua Xinghe Chenyuan Project after penetration.
The reporter noticed that Country Garden's public plan this time added "small redemption", which means that no difference will be made in the prepayment of 100000 yuan for each account.
Pengpai News learned from insiders that the negotiations between a certain joint-stock bank and Country Garden have been relatively smooth, and they support Country Garden's plan; But there are also some state-owned banks hoping that the plan can be improved by increasing down payments. The insider stated that Yang Huiyan, also known as Xiaoyang, personally participated in the extension negotiations. During the negotiations, a large bank requested the actual controller to provide personal guarantees.
Country Garden's actions were quick, and it took less than a week from the announcement of the suspension to the announcement of the plan. On the evening of August 12th, Country Garden announced the suspension of trading of 11 domestic corporate bonds, including "16 Country Garden 05".
Industry insiders have analyzed that the plan proposed by Country Garden may not be ideal, but it is practical. Based on the current market situation and overall debt situation, a three-year term is expected to avoid the second or even third exhibition in the later stage. According to sources close to Country Garden, since July 2023, Country Garden's working capital has been very tight. After persistently completing the redemption of "21 Tengyue Construction MTN02," "21 Tengyue Construction MTN003," "20 Bidi 02," and "19 Bidi 02" bonds, with a total principal and interest repayment of 5.89 billion yuan, the company has almost exhausted its last available cash resources. In addition, in the next two years, due to the need to ensure the delivery of the building, most of the company's funds will be in the project supervision account, and the proportion of freely available cash on the book is extremely low. Only with the delivery of project construction and the gradual release of regulatory account funds, can there be surplus funds available to flow up to the group to repay its public market debt at the group level.
The bond issuers announced to be suspended this time are Country Garden Real Estate Group Co., Ltd. and Guangdong Tengyue Construction Engineering Co., Ltd. 21 Bidi 01, 21 Bidi 02, 21 Bidi 03, 21 Bidi 04, 22 Bidi 02 and 22 Bidi 03, 19 Bidi 03, 20 Bidi 03, 20 Bidi 04 corporate bonds and one private placement bond 16 Bidi 05 issued by Country Garden Real Estate Group; A 16 Tengyue 02 issued by Tengyue Construction.
According to the statistics of Pengpai News, the balance of 11 bonds is about 15.702 billion yuan, with the earliest maturity date being September 2. It is the private equity bond 16 Bidi 05, with a balance of 3.904 billion yuan; The items due in September also include 21 Bidi 04 and 20 Bidi 03, with balances of 1.435 billion yuan and 2 billion yuan, respectively.
The announcement of suspension also includes 21 Bidi 02 and 21 Bidi 01, which will expire in 2024, with balances of 1.1 billion yuan and 2 billion yuan, respectively.
The reporter noticed that not all of Country Garden's domestic bonds due in 2024 are listed as suspended. The "fish in the net" are 20 Huabi A1 and 20 Huabi B1 due on May 25, 2024, with balances of 796 million yuan and 50 million yuan, respectively.
This announcement does not include overseas bonds. There are a total of 7 overseas bonds due at Country Garden in 2023 and 2024, with balances including HKD 3 billion, Thai baht 29.744 billion, and USD 1.55 billion.
As of now, Country Garden has not announced how to dispose of the upcoming overseas bonds. The latest update is the unpaid interest on two US dollar bonds that should be paid on August 7th. Both bonds have a 30 day grace period for payment of interest.
Two US dollar bonds, namely Country Garden 4.2% N20260206 and Country Garden 4.8% N20300630, were issued with a scale of 500 million US dollars each, with maturities on February 6, 2026 and August 6, 2030, respectively.
