Is this the news that marks the start of the recovery in China's stricken property sector?
For weeks now, Country Garden has been the developer closest to the edge, missing bond repayments and warning of its financial fragility. However, it has slowly managed to regain the confidence of investors.
On Tuesday, media reports in Hong Kong stated that Country Garden had gained approval from its creditors to extend the repayments on six onshore bonds by three years. Onshore creditors voted on Monday for proposals by the distressed developer to extend repayments on eight onshore bonds worth 10.8 billion yuan ($US1.48 billion) by three years.
In the vote that concluded at midnight on Monday (Sydney time), creditors approved the extension of six out of the eight bonds. There was no mention of why two votes were outstanding.
This latest extension comes two weeks after Country Garden won a convoluted three-year extension of repayments on a 3.9 billion yuan ($US548 million) onshore private bond. That vote had to be postponed for a day to enable the company to win approval.
The company still faces numerous hurdles, with payments due almost weekly for the rest of this year. However, support seems to be growing for the idea of delaying D Day for property groups.
While this is a form of 'kicking the can down the road' and postponing tough decisions, there appears to be more confidence that recent changes in policy may be starting to reassure investors and finance groups.
Several changes from the government and central bank regarding loans to the property sector have made it easier to win these votes, easing pressure on banks, in particular.
The news saw Country Garden shares jump 10% in early trading, but the enthusiasm faded, and the gain decreased by mid-afternoon trading.
The prices of key metals, led by copper, rose in electronic trading on the London Metal Exchange in Asia and on the Shanghai exchange as well. Iron ore prices also rose to over $US118 a tonne in Singapore.
