China Evergrande stares into the void as interest deadline passes | Invest News

NEW YORK (Reuters) – A deadline was set Thursday for China Evergrande, the world’s most indebted real estate company, to pay $ 83.5 million in interest on a dollar bond. With $ 305 billion in liabilities, Evergrande is struggling to honor its debts and global markets are watching for signs of default.

Here’s a timeline of this week’s developments.

Evergrande shares in Hong Kong hit their lowest level since 2010. Global stock markets are faltering amid contagion fears. The S&P 500 suffers its biggest single-day drop in four months.

S&P Global Ratings says it doesn’t expect Beijing to provide direct support to the company.

The cost of insuring China against default is at its highest level in nearly a year. The Yuan currency is under pressure.

The company “will come out of its darkest moment” and resume full-scale construction as soon as possible, the developer’s chairman said in a letter to staff.

Evergrande missed interest payments due Monday to at least two of its largest bank creditors, Bloomberg reports. The missed payments were expected as China’s Housing Ministry said the company would not be able to pay on time.

Fund giant BlackRock and investment banks HSBC and UBS have been among the biggest buyers of Evergrande debt, according to Morningstar data.

Bank of America cuts its growth forecast for China.

Evergrande holds an internal meeting and its chairman urges management to ensure quality delivery of properties and buyout of wealth management products.

Evergrande undertakes to settle interest payments on a national bond. The Chinese central bank is injecting liquidity into the banking system.

US Federal Reserve Chairman Jerome Powell has said Evergrande’s debt problems appear peculiar to China and see no parallel with the US corporate sector.

The governor of the Swiss central bank said it would be wrong to view the Evergrande situation as a small local problem.

Chinese Estates Holdings, Evergrande’s second largest shareholder, is considering withdrawing completely from its stake.

The Wall Street Journal reports that Chinese authorities have asked local governments to prepare for the potential fall of Evergrande.

A handful of Chinese real estate developers have seen their ratings downgraded by agencies due to concern over their debt and repayment capabilities.

A Thursday deadline to pay $ 83.5 million in interest on a dollar bond passed without Evergrande’s remark, and bondholders were neither paid nor heard from the company. Evergrande has a 30 day grace period.

China Evergrande’s electric car unit warns that without strategic investment or asset sales, it faces an uncertain future with its ability to pay staff and suppliers and mass-produce risky vehicles.

Some Chinese banks, insurers and shadow banks stop offering new loans to real estate developers.

The Chinese central bank is again injecting liquidity into the banking system.

(Written by Nick Zieminski in New York, edited by Nick Macfie)

Copyright 2021 Thomson Reuters.


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