Evergrande faces biggest payment test yet as grace periods end
BNN Bloomberg
China Evergrande Group is facing its biggest payment test since signs of a liquidity crisis emerged at the firm five months ago.
China Evergrande Group is facing its biggest payment test since signs of a liquidity crisis emerged at the firm five months ago.
Investors are waiting to see if the embattled developer makes coupon payments totaling US$148.1 million for three dollar bonds before the end of 30-day grace periods Wednesday. Evergrande missed the initial interest deadlines last month, Bloomberg-compiled data show.
The due date looms as credit-market stress spreads beyond China’s junk-rated builders. Higher-quality dollar bonds are suffering their worst selloff in months, as investors grow increasingly concerned about the impact on larger property firms and the broader economy.
While there’s been no indication that Evergrande will miss the payment, any such development could also trigger cross-default clauses among the builder’s US$19.2 billion of outstanding dollar notes and give creditors more room to negotiate.
Evergrande didn’t immediately respond to a request for comment.
The developer has so far pulled back from the brink of default by meeting other delayed coupons at the 11th hour before the grace period ended. Some holders of an Evergrande unit’s bond did not receive payment for two coupons originally due Saturday, though both notes have a 30-day grace period. It also has two more dollar coupons due in December.
