Chinese banks try to calm fears about developer's debts

Trying to dispel investor fears, some Chinese banks are disclosing what they are owed by a real estate developer that is struggling under $310 billion in debt

BEIJING -- Trying to dispel investor fears, some Chinese banks are disclosing what they are owed by a real estate developer that is struggling under $310 billion in debt and say they can cope with a potential default.

The announcements came as Evergrande Group promised to talk with some individual investors in its debt. Other creditors waited to see whether Beijing will step in to oversee a restructuring to prevent financial disruption.

Evergrande’s struggle to meet government-imposed debt limits has prompted fears a default might disrupt the Chinese economy or global financial markets. Ratings agencies say a default is likely. Economists say Beijing can prevent a credit crunch in China but wants to avoid bailing out Evergrande while it tries to force companies to reduce debt levels.

One of Evergrande’s biggest lenders, Zheshang Bank Co., said it is owed 3.8 billion yuan ($588 million) and has “sufficient collateral.”