China’s heavily indebted real estate company, Evergrande, avoided a destabilizing last-minute default for the third time last month, with a source telling Reuters that several bondholders had received overdue coupon payments.
Evergrande, the most indebted construction company in the world, is trying to meet its obligations and meet every deadline in recent weeks, as it has to deal with liabilities of more than $ 300 billion, of which 19 billion are bonds. in international markets.
Chinese media reported that several bondholders had received interest payments on the three installments of bonds totaling $ 148 million overdue last month.
Payments were made at the end of the 30-day grace period ending on Wednesday, as was the case with two separate overseas coupon payments due in late September for which grace periods expired at the end of the previous month.
A possible default would result in the company defaulting on payments and trigger provisions for successive deferrals on other Evergrande bonds (denominated in dollars), exacerbating a debt crisis looming over the world’s second-largest economy. and which has shaken markets worldwide.
“The short-term correction seems to be happening, but there is a long way to go before this issue is resolved. It is still early,” said a source familiar with the matter.
Although the construction company again managed to avoid a moratorium on payments, concerns about the real estate industry show no signs of receding, with the debt wall approaching.
Evergrande has coupon payments over $ 255 million through December 28.
It has come under strong pressure from its other creditors at home and the shrinking funding has overshadowed hundreds of its housing projects.
The focus of investors is now shifting to other indebted construction companies that have a series of direct payment obligations, including the Kaisa group.
Kaisa has the largest offshore debt of any Chinese construction company since the Evergrande, and sought help from creditors this week.
It has coupons that expire on Thursday and Friday, amounting to $ 59 million.
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Source From: Capital
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