Country Garden Holdings Company Ltd

China has begun signaling that it will not support the issuance of mandatory convertible bonds (MCBs), a key tool that has helped major property developers, including Country Garden, restructure their debt. The China Securities Regulatory Commission (CSRC) has rejected several MCB registrations, including those of Country Garden, which had planned to issue $13 billion in offshore MCBs and had already issued some. The CSRC stated that the applications did not meet the criteria because the entities were not considered reliable. Sino-Ocean Group has also been informed that the CSRC will not support its MCB registration. This decision adds pressure to resolving China's property debt problems, which have a total of about $130 billion in defaults, and could increase uncertainty for debt restructuring plans negotiated with creditors. MCBs issued overseas do not require prior approval but must be registered afterward, and multiple regulatory bodies are involved, raising questions about accountability if problems arise in the future.