On the night of October 11, New York time, China Evergrande Group’s offshore bondholders had not received interest payments on corporate debt, another $ 148 million coupon. This is the third time this has happened in three weeks, after the other two 83 and 46 million coupons expired on 23 and 29 September.
The real estate company, squeezed by a mountain of $ 300 billion in debt, has made no statements. On October 23, the deadline for the official declaration of default expires. Even for Fantasia, active in the luxury sector, governance problems are getting worse. Beijing launches maxi anti-corruption operation at the top of financial institutions.
The fears of US bondholders
The system fails, the Central Bank of China has injected another 1.56 billion dollars into the system, after the operations of the past weeks another dose of liquidity in the form of 7-day repurchase agreements. The interest rate set for i reverse repos is equal to 2.2%.
Glaring criticalities, in the United States a group of bondholders with 2.5 billion dollars in Evergrande bonds sharpens their legal weapons in the face of yet another payment offshore not honored. Kirkland & Ellis and the investment bank Moelis & Co. defend American creditors who want to prevent the sale of assets that could prevent the recovery of the debt.
So far Evergrande is trying to find the necessary liquidity by selling stake in the Shenyang bank for 1.5 billion or by selling the real estate management unit to the Chu family for another 5 billion.