Evergrande makes last-minute payment deadline
The troubled Chinese property developer Evergrande has once again avoided a default after it made a last-minute interest payment on three of its dollar bonds.
In October, Evergrande failed to pay its obligations for three of its dollar bonds, totalling $200 million, but it was afforded a 30-day grace period.
Citing a spokesperson for a clearing house, Bloomberg reported all obligations for the three bonds were met.
The world’s most indebted property developer had made similar eleventh-hour payments in the past, as it struggled to pay off its $420 billion debts.
Six Chinese property developers had defaulted on foreign bonds since Evergrande first began to show its cracks, affecting domestic markets and contributing to a rising cost of capital for Chinese companies. Meanwhile fewer people were buying apartments in China and the value of property was falling.
The United States Federal Reserve had warned that stresses in the Chinese real estate sector could spill into the American economy.
“In this environment, the ongoing regulatory focus on leveraged institutions has the potential to stress some highly indebted corporations, especially in the real estate sector, as exemplified by the recent concerns around China Evergrande Group,” it said.
“Given the size of China’s economy and financial system as well as its extensive trade linkages with the rest of the world, financial stresses in China could strain global financial markets through a deterioration of risk sentiment, pose risks to global economic growth, and affect the United States.”
AUTHOR
Liam Cormican
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