Looming Evergrande bond coupon payments intensify contagion fears

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HONG KONG, Oct 12 (Businesshala) – As China Evergrande Group (3333.HK) prepares to miss its third round of bond payments in three weeks, markets are shifting their focus to other indebted property developers as debt The wall of payment obligations has come due in the near term.

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According to brokerage CGS-CIMB, a total of $38.8 billion offshore bonds issued by 40 Chinese developers will mature from October to the end of 2022, with the next peak of $6.2 billion in payments in January.

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Evergrande’s $148 million coupon payment deadline is 0400 GMT on Tuesday, but bondholders had not received anything by the end of Asian trading on Monday. The market expects the troubled developer to default again after two other payment defaults in September.

High-yield Chinese bond markets were once again rout on Monday as fears about a rapidly spreading infection hit the $5 trillion region that drives a large part of the Chinese economy, continuing sentiment. Is.

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“If the liquidity problem does not improve markedly, we see more defaults ahead,” CGS-CIMB said in a note. Adding developers with weak credit ratings makes it very difficult to get refinance at the moment.

After Evergrande and Fantasia (1777.HK) missed their payments since September, smaller developers Modern Land (1107.HK) and Cynic Holdings (2103.HK) were at the latest scrambling to delay the deadline.

Modern Land on Monday urged bondholders to delay repayments at the end of this month by three months, while Cynic said it was likely to default next week.

Shares of Moderna fell more than 3% on Tuesday to hit new lows.

Shares of Evergrande’s electric vehicle unit (0708.HK) jumped more than 10%, however, after vowing to start producing cars next year.

Reporting by Claire Jim; Editing by Sri Navaratnam

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