China Evergrande bondholders receive overdue bond coupon payments – source

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HONG KONG (Businesshala) – Several bondholders in China Evergrande Group have received coupon payments from a debtor property developer, a source with knowledge of the matter said on Thursday, allaying concerns about a potentially volatile default.

FILE PHOTO: The company logo is seen at the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. Businesshala/Allie Song

Chinese media outlet Cailianshe previously reported that several bondholders have received interest payments in three bond tranches, which totaled more than $148 million in interest payments due last month, but whose grace period expired on Wednesday.

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The source declined to be named as they were not authorized to speak to the media. Evergrande did not respond to a request for comment.

Evergrande, the world’s most indebted developer, has been stumbling from deadline to deadline in recent weeks as it grapples with more than $300 billion in liabilities, $19 billion of which are international market bonds.

Failure to pay could result in a formal default by the company and trigger cross-default provisions for other Evergrande dollar bonds, threatening a debt crisis in the world’s second-largest economy.

Shares of Hong Kong-listed Evergrande jumped more than 9% as of mid-morning when relieved by the latest deadline.

The company, which also has a coupon payment of more than $255 million as of December 28, has come under pressure from a liquidity crisis that has weighed on the sector and threatened hundreds of projects.

The market is also looking at rival Casa Group, which has coupon payments of more than $59 million on Thursday and Friday. How does it have the most offshore debt of any Chinese developer after Evergrande?

Cassa, which has missed a payment on a wealth management product, was downgraded Thursday from “CCC-” to “CCC+” by the S&P with a negative outlook, following similar action by Moody’s.

The rating agency said CASA’s liquidity is running out, and it expects a default scenario to be inevitable within the next six months.

China’s asset woes have rocked global markets since September, despite Beijing’s efforts to reassure markets that the crisis did not get out of control.

Regulators and government think tanks have held meetings with developers over the past few weeks, and the market is expecting some easing of loan and housing policies to prevent a hard landing of the sector.

Editing by Lincoln Feast.


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