By Clare Jim
HONG KONG (Reuters) -China's Country Garden may announce a restructuring plan for its offshore debt soon, local media reported on Monday, as the country's largest private property developer faced another looming debt deadline.
Country Garden, which missed two dollar interest payments last month, has two coupons totalling $66.8 million coming due on Monday.
The developer declined to comment on the report by media outlet Cailianshe and whether it has made any payments.
Country Garden has $10.96 billion offshore bonds and 42.4 billion yuan ($5.81 billion) worth of loans not denominated in yuan. If it defaults, these debt will need to be restructured, and the company or its assets also risk liquidation by creditors.
The coupons due on Monday are tied to Country Garden's 6.5% April 2024 and 7.25% April 2026 bonds.
The payments have a 30-day grace period, but the developer faces a big test later this month, when its entire offshore debt could be deemed in default if it fails to pay a $15 million September coupon by Oct. 17.
China's property sector has been hit by a debt crisis since 2021. Companies accounting for 40% of Chinese home sales - mostly private property developers - have defaulted on debt obligations, leaving many homes unfinished.
More than two years on, the crisis has deepened as confidence in both housing and capital markets dried up, further squeezing developers' liquidity.
Beijing has rolled out a range of support measures in recent months to revive the sector, which makes up about a quarter of the world's second-largest economy.
Some analysts, however, say more measures are needed.
In a research note on Friday, UBS said property sales growth in major cities likely stayed weak in September, suggesting a limited rebound of sales despite more supportive measures to ease the property crisis.
China's average daily home sales based on floor area during the Golden Week holiday were down 17% from a year ago, according to China Index Academy on Saturday.
MARKETS SWEAT ON DEBT DEALS
The market is closely watching whether Country Garden, which owns projects across the country mostly in smaller cities, can manage to dodge default again by making payments at the last minute.
In September, Country Garden won approval from its onshore creditors to extend yuan bond payments, and in the same month made coupon payments on the offshore markets in the last hours of end of a grace period.
But the developer has not yet paid a $15 million coupon due Sept 17 and another $40 million coupon due on Sept 27, both of which have 30-day grace periods.
Shares in Country Garden fell around 3% on Monday.
The market is also watching any new development in China Evergrande Group, which is at the centre of the debt crisis, after it said late last month that its billionaire founder was being investigated over unspecified crimes.
The embattled developer has also said it was unable to issue new debt - a crucial step in a restructuring - due to an ongoing investigation of its main unit.
Evergrande Group shares tumbled 8%, compared to a 1.8% fall in the Hang Seng Mainland Properties Index.
Shares of its unit China Evergrande New Energy Vehicle Group briefly gained up to 9% after it said on Sunday a share sale plan with U.S.-listed NWTN had been halted amid "significant uncertainties" tied to Evergrande group. The stock had been suspended since Sept. 28.
($1 = 7.2951 Chinese yuan renminbi)
(Reporting by Clare Jim; Editing by Lincoln Feast)
