• Contact
  • Privacy Policy
  • Advertise With Us
  • Login
  • Register
Your Trading Edge Magazine
  • Home
  • Feature
    • Market Commentary
    • Expert Advice
    • Columns
  • Trading
    • Shares and Trading
    • Technical Analysis
    • Trading Mindset
  • Crypto News
  • Finance
  • Subscribe
No Result
View All Result
  • Home
  • Feature
    • Market Commentary
    • Expert Advice
    • Columns
  • Trading
    • Shares and Trading
    • Technical Analysis
    • Trading Mindset
  • Crypto News
  • Finance
  • Subscribe
No Result
View All Result
Your Trading Edge Magazine
No Result
View All Result

Evergrande Moment of Truth Arrives With Bond Payment Deadlines

September 19, 2021
in Finance
Reading Time: 3 mins read
A A
0
Evergrande Moment of Truth Arrives With Bond Payment Deadlines
0
SHARES
14
VIEWS
ShareShareShareShareShare

(Bloomberg) — China Evergrande Group bondholders are about to find out if the property giant’s liquidity crisis is as dire as it appears.

Interest payments on two Evergrande notes come due Thursday, a key test of whether the developer will continue meeting obligations to bondholders even as it falls behind on payments to banks, suppliers and holders of onshore investment products. Investors are pricing in a high likelihood of default, with one of the notes trading at less than 30% of face value.

Concern over Evergrande’s ability to make good on $300 billion of liabilities is spilling into China’s financial markets. Shares of other real estate firms have plunged, while the yield on an index of dollar-denominated junk bonds has climbed to about 14%, the highest in nearly a decade. The People’s Bank of China injected $14 billion of short-term cash into the financial system on Friday in a sign policy makers want to soothe nerves.

The Evergrande payments due Thursday include $83.5 million of interest on an 8.25%, five-year dollar bond, Bloomberg-compiled data show. There is a 30-day period before a missed payment is considered a default, according to the bond’s covenants. Evergrande needs to pay a 232 million yuan ($36 million) coupon on an onshore bond the same day.

In total, Evergrande has $669 million in coupon payments coming due through the end of this year. Some $615 million of that is on dollar bonds, Bloomberg-compiled data show. Fitch Ratings flagged the increased chance of a payment failure this month when it slashed the firm’s credit grade even deeper into junk territory, citing the risk of “probable” default.

Evergrande is also scheduled to pay interest on bank loans Monday, with a one-day grace period. Monday and Tuesday are public holidays in China. While details on the amount due aren’t publicly available, Chinese authorities have already told major lenders not to expect repayment, people familiar with matter said last week. Evergrande and banks are discussing the possibility of extensions and rolling over some loans, the people said.

Bond investors are rushing to lock in professional help as a potential restructuring for Evergrande edges closer to reality. Addleshaw Goddard has engaged with some of the company’s bondholders and is preparing to establish a creditor committee to negotiate with Evergrande, according to a person familiar with the matter.

Evergrande’s debt pile includes about 571.8 billion yuan of borrowings from banks and other financial institutions such as trusts, with 240 billion yuan due in less than one year. The average borrowing cost stood at 9.02% as of June 30. A portion of Evergrande’s borrowings was secured by a pledge of its properties and equipment, land use rights, cash held at banks and the equity interests of certain subsidiaries.

China Minsheng Banking Corp., Agricultural Bank of China Ltd. and Industrial & Commercial Bank of China Ltd. were among the developer’s principal banks at the end of last year.

Whether the selloff in Evergrande bonds drags down the broader credit market may depend on the company’s ability to buy time with banks. A messy default on loans could stoke fears of widespread contagion, something Xi Jinping’s government has been keen to avoid even as it tightens financing restrictions on overstretched developers and discourages government bailouts.

More stories like this are available on bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.

Credit: Source link

ShareTweetSendPinShare
Previous Post

Russia And China Are Looking To Tap Afghanistan’s $1 Trillion Resource Reserves

Next Post

Buyers Can Pay in Bitcoin for Manhattan Retail Properties

Related Posts

Economic Pressures Contribute to Finance Leaders Improving Last-Mile Readiness
Finance

Economic Pressures Contribute to Finance Leaders Improving Last-Mile Readiness

June 29, 2022
6
The Linux Foundation and Fintech Open Source Foundation Announce the Schedule for Open Source in Finance Forum London 2022, July 13
Finance

The Linux Foundation and Fintech Open Source Foundation Announce New Keynote Speakers for Open Source in Finance Forum London 2022

June 29, 2022
6
Climate Impact X Selects Nasdaq Technology to Power New Global Carbon Exchange
Finance

Climate Impact X Selects Nasdaq Technology to Power New Global Carbon Exchange

June 29, 2022
5
Ball Announces Completion of Credit Facilities
Finance

Ball Announces Completion of Credit Facilities

June 29, 2022
7
RansomHouse extortion group claims AMD as its latest victim
Finance

RansomHouse extortion group claims AMD as its latest victim

June 29, 2022
4
Next Post
Buyers Can Pay in Bitcoin for Manhattan Retail Properties

Buyers Can Pay in Bitcoin for Manhattan Retail Properties

Recommended

FINRA CEO welcomes crypto employees who were laid off as agency increases focus on digital assets

FINRA CEO welcomes crypto employees who were laid off as agency increases focus on digital assets

June 16, 2022
4
Strategic Cost Management Helps Energy Companies Uncover Supply Chain Inefficiencies

Plans For a Minimum Tax On Profits Of Multinationals- Global Trade Mag

June 26, 2022
5
FTX exploring a deal to buy Robinhood: Bloomberg report

FTX exploring a deal to buy Robinhood: Bloomberg report

June 28, 2022
5
Central African Republic President Reveals Crypto Hub Launch Date

Central African Republic President Reveals Crypto Hub Launch Date

June 28, 2022
5
Crypto contagion is main risk to the market, says analyst

Crypto contagion is main risk to the market, says analyst

June 28, 2022
6
Your Trading Edge Magazine

This is an online news portal that aims to share the latest news about trade, finance, crypto and much more. Feel free to get in touch with us!

What’s New Here!

  • Economic Pressures Contribute to Finance Leaders Improving Last-Mile Readiness
  • BlockFi Gets Money Services License in Iowa Weeks After Paying a $1M Penalty
  • 80% of U.S. Small Businesses Are Confident They Could Withstand a U.S. Economic Recession

Subscribe Now

Loading
  • Contact
  • Privacy Policy
  • Advertise With Us

© 2021 - ytemagazine.com - All rights reserved!

No Result
View All Result
  • Home
  • Feature
    • Market Commentary
    • Expert Advice
    • Columns
  • Trading
    • Shares and Trading
    • Technical Analysis
    • Trading Mindset
  • Crypto News
  • Finance
  • Subscribe

© 2021 - ytemagazine.com - All rights reserved!

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?