Original title: Evergrande Real Estate’s rating downgraded, trading of all bonds is suspended for 1 day, Fitch: If the debt defaults, the impact may be wider
[文/观察者网 吕栋 编辑/周远方]
On September 15, China’s largest credit rating agency “China Chengxin International” issued an announcement stating that it decided to lower the credit rating of Evergrande’s real estate entity from AA to A, and set “15 Evergrande 03”, “19 Evergrande 01”, “19 Hengda 02”, “20 Hengda 01”, “20 Hengda 02”, “20 Hengda 03”, “20 Hengda 04”, “20 Hengda 05” and “21 Hengda 01” debt The credit rating was lowered from AA to A, and the credit rating of the entity and the aforementioned debts continued to be included on the watch list for possible downgrade.
This is the second time since September that China Chengxin International has downgraded Evergrande’s real estate entity and debt credit ratings.
Evergrande Real Estate Group Co., Ltd. issued an announcement on the suspension of corporate bonds: All existing corporate bonds of Evergrande Real Estate will be suspended for one trading day from the opening of the market on September 16, 2021, and trading will resume on September 17, 2021. , The above-mentioned bond trading methods will be adjusted from the date of resumption of trading.
The liquidity crisis that is difficult to alleviate is the reason for the continuous downgrade of Evergrande’s rating.
China Chengxin International believes that the liquidity situation of Evergrande Group and Evergrande Real Estate continues to deteriorate, and that matters such as equity and asset sales have not made substantial progress. The continued decline in sales returns will further aggravate the pressure on cash flow, which is caused by the increasing negative information. The decline in the confidence of relevant parties will increase the uncertainty of the recovery of production and operation, increase the difficulty of loan renewal and renewal negotiations, and further negatively affect its credit quality.
Subsequently, Evergrande Real Estate issued an announcement stating that this credit rating adjustment will lead to changes in the trading methods of the aforementioned bonds.
Among them, the trading methods of “15 Evergrande 03”, “19 Evergrande 01”, and “19 Evergrande 02” will be adjusted to only adopt quotation, inquiry and agreement trading methods. “20 Evergrande 01” and “20 Evergrande 02″ 02”, “20 Hengda 03”, “20 Hengda 04”, “20 Hengda 05” and “21 Hengda 01” trading methods will be adjusted to only adopt negotiated block trading methods, and maintain the original net price valuation Way.
China Chengxin International is not the only one who downgraded Evergrande Real Estate.
On September 15, local time, the US credit rating agency Standard & Poor’s (S&P) announced that Evergrande Real Estate’s rating was further downgraded from “CCC” to “CC”. The rating outlook was negative, due to the decline in liquidity and the risk of default, including debt Possibility of reorganization.
On the same day, Bloomberg reported that the Ministry of Housing and Urban-Rural Development held a meeting with some commercial banks this week to inform them that Evergrande will not pay interest on loans due on September 20. The person also revealed that Evergrande is still discussing loan extensions and other matters with the bank.
The report pointed out that as of June 30, Evergrande’s debt scale had shrunk to 571.8 billion yuan, the lowest in five years, but transactions and other payables increased by 15% from six months ago to a record 951.1 billion yuan.
On September 14, Evergrande Group stated that if it fails to fulfill its obligations for guarantees or other due debts, and fails to reach an extension of repayment or other alternatives with investors or creditors, it may lead to cross-default under existing financing arrangements , And may cause the relevant creditors to demand accelerated debt maturity.
After the liquidity crisis broke out, Evergrande’s bonds and stocks fluctuated sharply, and its stock price has plummeted 81% this year.
Bloomberg report screenshotLater on September 14, Fitch, one of the world‘s top three rating agencies, pointed out that if Evergrande defaults on debt, many industries may face higher credit risks, but the overall impact on the banking industry will be controllable. The agency said in the report that the default will exacerbate the credit polarization between homebuilders and may adversely affect some smaller banks.
A week ago, Fitch downgraded Evergrande’s rating from “CCC+” to “CC”.
Fitch pointed out that 572 billion yuan of Evergrande’s loans are held by banks and other financial institutions, but banks may also have indirect exposure to developers’ suppliers who owe 667 billion yuan in goods and services. Yuan.
“Small banks with greater exposure to Evergrande or other vulnerable developers may face a substantial increase in non-performing loans (NPLs), depending on how the credit incident involving Evergrande develops,” Fitch said.
But the agency added that a recent stress test conducted by the People’s Bank of China showed that if the non-performing loan ratio of real estate development loans rises by 15 basis points, the average capital adequacy ratio of China’s 4,000 banks will only decline slightly.
On September 15, the spokesperson of the National Bureau of Statistics of China, Fu Linghui, in response to related issues involving the Evergrande Group, said that some large real estate companies have encountered some difficulties in the operation process, and the impact on the development of the entire industry needs to be observed. With the continuous improvement of the real estate market system, China’s real estate market is expected to maintain stable development.
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