HONG KONG, May 9 Reuters Embattled Chinese property developer Country Garden said it was unable to pay two onshore coupons due on Thursday, but China Bond Insurance Co would do so on its behalf if it missed paying within a grace period that ends next week.

Such a move would be the first time the stateowned company has come to the rescue of an issuer under a Beijingled programme launched in 2022 to bolster investor confidence, and analysts warned it could make future issuance harder.

Country Garden, which defaulted on its 11 billion of offshore bonds and extended other onshore bond repayments late last year, said in a filing it was unable to pay onshore coupons due on Thursday, though it was still trying to raise funds.

Due to reasons including sales recovery lagging expectations, difficulties of reallocating capitals, we are unable to pay the coupons on time, the developer said.

But it aimed to make the payment and additional interest incurred by May 13, within the grace period of five working days, it added.

In August 2022, Chinese regulators told the stateowned company, a provider of financial guarantee services, to give guarantees for onshore bond issuance by a few selected private property developers, Country Garden among them.

The directive came as concerns mounted that a deepening debt crisis and increasing defaults could impact companies that had been regarded as financially sound.

As part of the programme, China Bond Insurance Co will provide full amount,…