Chinese property developer Country Garden reportedly set to avert yuan bond defaut

Embattled Chinese real estate developerCountry Gardenmay avoid a default on its yuan-denominated bonds after most holders ofa local noteagreed not to demand repayment this week،according to Bloomberg News.

During a meeting at the Shenzhen Stock Exchange last week، most investors agreed to forego a put option expiring Dec. 13 that allows investors to demand repayment before maturity next year، the news outlet reported Tuesday، citing unnamed people with direct knowledge of the matter.

The report came after markets in Hong Kong and mainland China closed. Country Garden shares in Hong Kong closed higher by more than 8% on Tuesday، prior to the news.

Country Garden was once the largest non-state-owned developer in China by sales. It ran into financing troubles this year، anddefaulted on a U.S. dollar bondlast month، according to Bloomberg.

Economic growth in China has been sluggish due in part due to serious debt problems that some of the largest real estate developers are facing، as Beijing moves todeleverage its once-bloated property sector— which accounts for about 33% of its economy.

Nomuraestimatedthe size of unfinished، pre-sold homes in China to be about 20 times the size of property developer Country Garden as of the end of 2022.