
Country Garden is under pressure to deliver homes to customers (Getty Images)
Country Garden Holdings, the financially stressed Chinese real estate giant, has received a helping hand this week from the company’s co-chairman as well as the Industrial and Commercial Bank of China (ICBC) through two loans totalling $928 million.
China’s top developer by sales has raised $280 million in financing from ICBC (Asia), the Hong Kong subsidiary of the mainland state-owned bank, Country Garden announced today in a filing to the Hong Kong stock exchange. The financing has a term of 36 months and takes the form of a dual-tranche term loan facility in Hong Kong dollars and US dollars, with various financial institutions acting as the original lenders and ICBC (Asia) serving as the facility agent.
The fresh financing comes a day after the Guangzhou-based builder announced it had secured a nearly HK$5.1 billion ($647 million) interest-free loan from Concrete Win Limited, a company wholly owned by Yang Huiyan, who co-chairs the property group alongside her father and company founder, Yang Guoqiang. The unsecured loan “to support the operation and development of the Group” has an initial term of three years and one month and may be extended by both parties.
Country Garden withdrew from Fitch and S&P Global Ratings’ credit ratings in November after being downgraded by both agencies. Weak housing sales have pressured the developer’s liquidity, with contracted sales plunging by 37 percent in the first ten months of the year, according to a November analysis by Moody’s Investors Service.
Fundraising Drive Continues
The latest financial infusions follow a series of major equity sales within the Country Garden empire since late November, as the company faces RMB 524.25 billion ($75.2 billion) in maturing liabilities through mid-2023, based on its interim report for the period ending 30 June.

Country Garden co-chairman Yang Huiyan is lending her company $647 million (Source: Country Garden Weibo)
Yang Huiyan agreed to sell a portion of her controlling stake in Country Garden Services Holdings, the group’s listed property management arm, for about HK$5.06 billion ($650 million) on 11 December, cutting her stake in the company from 43.15 percent to 36.12 percent.
The developer also announced on 14 December it had successfully issued 1.78 billion new shares for HK$2.70 each, raising net proceeds of HK$4.7 billion. That stock issue came after Country Garden in November raised HK$3.87 billion to repay offshore debts and provide general working capital.
Country Garden’s “abilities to restore sustained access to both onshore and offshore credit markets remain uncertain,” credit ratings agency Moody’s commented on 15 November, after the developer announced its share placement plan for that month.
Moody’s added that the company’s liquidity position at the time was adequate, although its liquidity buffer had “thinned” after Country Garden repaid matured onshore and offshore debt in recent months. The company would have sufficient funds to cover its maturing debt and dividend payments over the next 12 to 18 months, Moody’s said.
S&P Global Ratings downgraded Country Garden from BB to B+ in November, citing the company’s financing challenges and weaker confidence in China’s private real estate firms, while Fitch downgraded the developer from BB+ to BB- at the end of October.
“Uncertainty remains over the sustainability of its sales, as well as the availability of its cash on hand,” Fitch said in a statement on 9 November.
Plummeting Sales
In its commentary, Moody’s noted that Country Garden’s attributed contracted sales had fallen 37 percent to RMB 309 billion in the first ten months of the year. S&P Global Ratings found in early November that contracted sales slid by 27 to 30 percent year-over-year in September and October. The agency projected that sales would further decline by 4 to 5 percent per year, to a range of RMB 320 billion to RMB 340 billion.
One disadvantage for the company is its heavy exposure to low-tier cities in China, which have weaker economies and housing demand than first-tier cities. Sixty-nine percent of Country Garden’s sales in mainland China occurred in third- and fourth-tier cities during the first half of the year, the company revealed in its interim report.
Despite possible weakness in sales over the next year or two, “the government’s latest measures to support privately owned developers to issue onshore bonds and other arrangements to assist developers in addressing refinancing needs could, to some extent, temper the company’s refinancing pressure,” Moody’s commented.
Country Garden announced a leadership reshuffle last week, with two of its executive directors – including Yang Zhicheng, nephew of Yang Guoqiang – tendering their resignations while the builder elevated a pair of executives to replace them on the board.
Leave a Reply