🚨Country Garden secured a $1.14 billion shareholder bail-in as part of a $14.1 billion offshore debt restructuring—one of China’s largest ever. The founding family’s entity, Concrete Win Ltd, will convert loans to equity at HK$0.60 per share, signaling insider support ahead of a critical Nov 5 creditor vote. If passed, bondholders face a 78% haircut, recovering just ~22¢ on the dollar. The move highlights both the scale of China’s property bust and the limited rescue scope available to private developers.
Offshore Debt Subject to Restructuring: $14.1 billion — [Source: Reuters].
Bondholder Recovery Estimate: ~22 cents per $1 of face value (78% haircut) — [Source: Reuters].
Shareholder Loan-to-Equity Conversion: $1.14 billion at HK$0.60/share — [Source: Reuters].
Contracted Sales (Sept 2025): ¥2.58 billion (-29% YoY) — [Source: Reuters].
Loan Performance. Haircuts imply recovery values typical of unsecured claims; lenders now prioritize onshore collateral. Offshore debt likely converts into equity with no interim coupon, crushing carry.
Demand Dynamics. September’s 29% YoY sales decline confirms buyer flight. Pre-sales no longer fund construction, forcing developers to seek balance-sheet support or halt projects.
Asset Strategies. Projects under construction risk long downtimes; restructuring shifts focus from new starts to delivering pre-sold units. Cost containment and debt standstills are key.
Capital Markets. Offshore China HY property bonds price <25 cents; new issuance frozen. CLO/CMBS investors avoid Chinese collateral, redirecting flows to India and SE Asia.
Equity infusion buys time, not a turnaround.
Homebuyer demand remains the binding constraint.
Global credit spreads reprice China risk sharply.
Distress templates favor onshore stakeholders.
🛠 Operator’s Lens
Refi. Few windows for offshore refinancing remain; domestic banks roll selectively for state developers.
Value-Add. Pause acquisitions pending clarity on asset liquidations; focus on completing existing phases.
Development. Assume no presale liquidity; require full funding to completion and strict cash escrow.
Lender POV. Collateral coverage must be verified with independent valuations; cross-border enforceability discounted >50%.
Creditors vote Nov 5 on Country Garden’s plan; approval could set a template for Vanke and others. A Jan 2026 court hearing looms if talks fail. Policymakers may expand housing easings to restore confidence, but sector recovery is likely multi-year. Global investors will watch pricing in Asian HY and emerging-market credit for spillovers.
Reuters — “Country Garden Gets $1.14 B Shareholder Bail-In; Bondholders Brace for 78% Haircut” (Oct 2025). https://www.reuters.com Hong Kong Court Filings — Country Garden Liquidation Proceedings (2025).National Bureau of Statistics (China) — Residential Sales Data (2025).
