China Property Developer Country Garden Completes Debt Restructuring

Largest Property Restructuring Since Evergrande

Country Garden Holdings Co. completed the restructuring of $22 billion in offshore debt on November 28, according to a filing with the Hong Kong Stock Exchange. The deal, which creditors approved with a 73% majority vote, converts approximately 60% of bond obligations into equity, extends maturities on the remaining debt to 2032, and reduces coupon rates to between 2% and 3.5%.

The restructuring is the largest by a Chinese property developer since China Evergrande Group's $19 billion offshore deal in early 2024. It removes a significant overhang from Country Garden's balance sheet, which carried total liabilities of approximately 1.36 trillion yuan ($187 billion) at the end of June.

Onshore Creditors Reach Separate Terms

Country Garden separately negotiated with domestic creditors, extending maturities on 148 billion yuan in onshore bonds and bank loans by an average of four years. Chinese state-owned banks, which are among the largest lenders, agreed to the terms following directives from the China Banking and Insurance Regulatory Commission to support orderly workouts for "systemically important" developers.

"The completion of Country Garden's restructuring is a significant positive for the broader property sector," said Kaven Tsang, a senior analyst at Moody's Ratings in Hong Kong. "It provides a template for other distressed developers and reduces the tail risk of a disorderly default cascade."

Operational Challenges Persist

Despite the financial restructuring, Country Garden's operational metrics remain weak. The developer delivered 47,200 residential units in the first 10 months of 2025, down 38% from the same period in 2024. Contracted sales totaled 32.4 billion yuan, a 44% decline, reflecting both reduced launches and subdued buyer confidence.

The company's land bank, concentrated in lower-tier cities where demand has been weakest, presents an ongoing challenge. Country Garden holds undeveloped sites in over 280 cities, but analysts estimate that perhaps only 40% of these projects are commercially viable under current market conditions.

Broader Market Context

China's property sector has contracted for three consecutive years. National new home sales declined 18% year-over-year through October, while housing starts fell 22%. The government's rescue measures, including reduced down-payment requirements, relaxed purchase restrictions, and subsidized mortgage rates, have slowed the decline but failed to trigger a meaningful recovery.

Approximately 50 Chinese developers have defaulted on offshore bonds since mid-2021, representing roughly $140 billion in obligations. Of these, only five have completed restructuring agreements, highlighting the complexity and scale of the unwinding.

What Comes Next

Country Garden's shares, which have been suspended since April 2024, are expected to resume trading on the Hong Kong Stock Exchange in January 2026. The stock last traded at HK$0.42, giving the company a market capitalization of approximately $3.2 billion.

Analysts warn that equity holders face substantial dilution from the debt-to-equity conversion. Post-restructuring, existing shareholders will control less than 15% of the company, with former bondholders holding the majority stake.

The restructuring's success will ultimately depend on whether China's property market stabilizes. Economists surveyed by Bloomberg expect national home prices to bottom in mid-2026, with a gradual recovery beginning in the second half of the year.