China's Largest Developer Country Garden Warns of Possible Default on Offshore Debt

Country Garden, China's largest private property developer, warns it may default on offshore debt obligations due to liquidity issues. This could lead to one of China's biggest debt restructurings.

The company has missed some recent coupon payments and faces grace periods expiring next week for additional payments totaling over $80 million.

Country Garden has appointed financial advisers to examine its capital structure and liquidity position and develop a restructuring plan.

The developer has won approval from onshore bondholders to extend the maturity of $2 billion of domestic bonds.

Country Garden's warning underscores the severe liquidity squeeze in China's property sector, as developers accounting for 40% of home sales have already defaulted.