22.10.2021, 10:2522.10.2021, 12:05
According to an inside source, the troubled Chinese real estate company Evergrande has funneled millions of funds to prevent an imminent default. As the person familiar with the matter told Reuters news agency on Friday, the company was said to have transferred $83.5 million of the coupon payments to an escrow account with Citibank.
So Evergrande can settle upcoming payments for a dollar bond. This Saturday, the grace period for a multi-million dollar interest payment that was supposed to be due on September 23 is ending.
The insider confirmed a report that appeared Friday in the government financial newspaper, The Securities Times. Accordingly, Evergrande was able to pay all bondholders before the grace period expired on October 23. The news brought some relief to investors and regulators. The real estate company’s dollar bonds rose on Friday morning. Shares of Evergrande also rose about four percent.
The mountain of debt of 300 billion dollars
Evergrande is sitting on a mountain of debt equivalent to about $300 billion. In light of the scale of liabilities, financial markets have recently been concerned that the group’s collapse could trigger a fire in the Chinese real estate sector. Failure to pay interest could result in a formal default on the part of the company and default on other Evergrande dollar bonds.
“This is a positive surprise,” said James Wong, portfolio manager at GaoTeng Global Asset Management Ltd, adding that many had expected a default. Wong said the news will boost bondholders’ confidence.
Evergrande has expired approximately $280 million in coupon payments due October 23, October 29 and 11 on its dollar bonds. This triggered a 30-day grace period in each case. Evergrande was initially unable to provide any comment on the information on the interest payment being paid. (sda/awp/reu)
Because happiness never hurts 25 wise fortune cookie special quotes
You may also be interested in:
“Tv expert. Hardcore creator. Extreme music fan. Lifelong twitter geek. Certified travel enthusiast. Baconaholic. Pop culture nerd. Reader. Freelance student.”