Bondholders will soon know if the liquidity crisis of Chinese real estate developer Evergrande Group is as horrifying as it really seems.
China’s Ministry of Housing, Urban and Rural Construction last weekHe told financial institutions that the company would not be able to pay interest on the loan on the 20th.
Evergrande does not pay interest due 20th of this month-Chinese government tells banks
Evergrande China will also refrain from paying interest on two corporate bonds on the 23rd. Even if payments to banks, suppliers, and investors of domestically traded financial products are delayed, it will be a touchstone to see if they can continue to meet their obligations to pay corporate bond holders.
One of the corporate bonds trades at a level below 30% of par value, and investors have a high probability of factoring in the possibility of default.
As a result of the anxiety over the debt fulfillment of 300 billion dollars (about 33 trillion yen) held by Evergrande Group in China’s financial markets, other real estate related stocks also plummeted, and the dollar-denominated junk bond (speculative rating bond) index Yields are rising.People’s Bank of China (Central Bank) provided short-term funds of $ 14 billion to the financial system on the 17thSupplied.
Chinese People’s Bank, Short-term Funding of 1.5 Trillion Yen-In the Evergrande Crisis, Market Shake
According to Bloomberg data, the $ 83.5 million dollar-denominated 5-year bond (with a coupon rate of 8.25%) will be due on the 23rd. According to the bond’s covenants, there is a 30-day grace period before payment delays are determined to be defaults.
On the 23rd, interest payments of 232 million yuan (about 3.9 billion yen) of RMB-denominated bonds will also overlap. Interest payments due by the end of the year total $ 669 million.
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Evergrande Moment of Truth Arrives With Bond Payment Deadlines（抜粋）
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