are doubtful the Chinese developer will be in a position to service debt that will come due later this year without liquidity support, after it averted a catastrophic default this week at the last minute.
The company paid $22.5 million in dollar bond coupons on Tuesday hours ahead of a grace period deadline, pulling back from the"Historically, external creditors have really not done well in restructurings coming out of China," said Edward Al-Hussainy, senior currency and rates analyst and head of emerging market fixed income Research at Columbia Threadneedle, which holds some of Country Garden's dollar bonds.
The developer may delay the upcoming coupon payments, use the grace period to come up with a restructuring plan, and try to convince investors to accept it, said a portfolio manager with a U.S. asset manager, which owns some Country Garden bonds. Despite those measures, China's new home prices fell for the fourth month in August, according to a private survey on Friday, as the property debt crisis kept confidence at a low ebb.
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