Country Garden Defaults for First Time on Dollar Bonds

(Bloomberg) — Chinese developer Country Garden Holdings Co. was found to be in default on a dollar bond for the first time, underscoring its fall into distress amid a broader property debt crisis that’s shaken the world’s second-biggest economy.

Country Garden’s failure to pay interest on the note within a grace period that ended last week “constitutes an event of default,” according to a notice to holders from trustee Citicorp International Ltd. seen by Bloomberg News. That means the trustee must declare principal and interest due immediately if holders of at least 25% in aggregate principal amount of the notes outstanding demand it. There is no indication that creditors have made any such demand yet.