Country Garden's USD 17.7 billion offshore debt overhaul wins strong credito...

by WANG Yuhan

Country Garden Holdings has cleared a key hurdle in its year-long debt crisis after creditors overwhelmingly approved its offshore restructuring plan.

The Chinese developer said on Thursday that the plan won more than 75% approval in both creditor groups at a November 5 meeting—83.71% for syndicated loans and 96.03% for dollar bonds and other debts. The deal covers about US$17.7 billion, or roughly 127 billion yuan, in offshore liabilities and will reduce interest-bearing debt by around US$11.7 billion (84 billion yuan).

"This is a milestone event," said YAN Yuejin, deputy director of the E-house China Research Institute, in an interview with Jiemian News. "It means Country Garden can move forward with a lighter balance sheet, and it marks real progress in risk reduction across the sector."

The approval caps a 300-day process that began in January, covering 34 separate debt instruments governed by U.S., U.K., and Hong Kong law. Unlike most defaulted developers, Country Garden started talks before a public default, opting for what analysts call a "pre-emptive restructuring."

The plan combines cash buybacks, debt-to-equity swaps, new bond issuances, and in-kind payments to lower borrowing costs and extend maturities—some up to 11.5 years, among the longest in the industry. The new bonds carry rates between 1% and 2.5%, well below previous levels.

The company expects to book up to 70 billion yuan in restructuring gains, strengthening its net assets. A court hearing scheduled for December 4 will be the final step before implementation.

Analysts say strong creditor backing reflects both confidence in Country Garden's recovery and the desire to avoid deeper losses from liquidation. With a debt ratio above 90% and more than 186 billion yuan already in default, forced asset sales would likely yield lower recoveries.

The developer's controlling shareholder also converted US$1.15 billion in loans into equity, bolstering confidence. Since 2022, Country Garden has raised over 65 billion yuan through asset sales and has delivered more than 1.8 million homes over four years—evidence, analysts say, of its determination to stay afloat.

Industry observers view the deal as a model for other distressed Chinese developers. Recent restructurings, from SUNAC to Logan, have shifted from simple extensions to deep debt cuts. "Debt reduction is now the core," said LI Yujia of the Guangdong Housing Policy Research Center.

If approved by the court, Country Garden's plan could become a landmark case in China's property market cleanup, giving the once-dominant builder a rare chance to reset and rebuild.