2 developer, needs to prioritise its limited funds towards the domestic market where the stakes are much higher for the country's financial system. Hengda Real Estate Group Co, Evergrande's flagship unit, has though transferred funds to pay an 'onshore' bond coupon of 121.8 million yuan ($19 million), sources with knowledge of the matter said. Evergrande and the Guangdong provincial government did not immediately respond to Reuters requests for comment.Įvergrande is scrambling to raise funds to pay its many lenders and suppliers, amid expectations it is about to formally default on one of international bonds. When contacted, a Hopson representative asked Reuters to await an announcement. Sources told Reuters that Evergrande, teetering on the brink of collapse with more than $300 billion in debt, had been forced to stall its proposed $2.6 billion, 51% stake sale (6666.HK) to smaller rival Hopson Development (0754.HK) after failing to win the blessing of the Guangdong provincial government which is overseeing Evergrande's restructuring. SHANGHAI/LONDON, Oct 19 (Reuters) - China's property sector saw more drama on Tuesday as Evergrande (3333.HK) shelved plans to sell a majority stake in its property services unit, Sinic formally declared default and Kaisa was crunched by another credit rating cut. Sunac made $27.14 mln offshore coupon payment -source.Evergrande paid onshore bond coupon due Tue - sources.Deal to sell 51% in property services unit put on hold -sources.So far this year, the stock has lost 87%, CNN reports. Even if those investors end up losing everything, the systemic impact will be tiny.”įears of default sent shares of Evergrande plummeting 20% on Monday. “Investors in those bonds will suffer losses but since the risk of Evergrande’s default has been high for a long time, those who invested in the bonds should be well-prepared for what is happening now. “As of 2021, the size of the bond market (total debt outstanding) is estimated to be at $119 trillion worldwide and $46 trillion for the US market - the Evergrande bonds are 0.04% of the U.S. economy since it has only $20 billion in U.S. Peter Cohan, a lecturer at Babson College and author of “Goliath Strikes Back,” told GOBankingRates that Evergrande’s default will have no significant effect on the U.S. We are therefore assuming they were not paid,” according to Fitch. “In addition, the company did not respond to our request for confirmation on the coupon payments. The group holds about $300 billion worth of debt and Fitch notes that there has been no announcement from the company or the trustee regarding the payments after the grace periods lapsed. The company also has businesses in electric vehicles, finance, healthcare and cultural tourism, according to Fitch. 6.Įvergrande is a top-three Chinese property developer by contracted sales, headquartered in Shenzhen, which has a strong national presence, with 798 projects in 234 cities covering all of China’s 31 provinces and municipalities. 9, Fitch Ratings downgraded the company and its subsidiaries to “Restricted Default,” reflecting the non-payment of coupons due Nov. See: Why Everyone is Talking About Evergrande: The Chinese Giant Driving Global Selloff Fearsįind: Why the Debt Ceiling Is Always Up for Debate China Evergrande, the Chinese property developer, has defaulted on its debt, according to Fitch Ratings.
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