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The Chinese real estate behemoth has defaulted on its debt payments. Evergrande has been declared in default by Fitch, which has downgraded company to "limited default" due to its inability to pay a $82.5 million coupon when it was due. Evergrande's $19.2 billion debt could face cross-defaults as a result of this.
According to the newspaper, the Chinese government's efforts to avoid a financial crisis in the real estate sector are thwarted by a default by a prominent property developer. As of June, Evergrande owed $300 billion. Experts believe that a downgrading would put more pressure on the corporation. The developer's work, however, continues as long as the bankruptcy process is not initiated.
The Communist Party will not tolerate a significant accumulation of debt that threatens financial stability, according to the article, therefore Beijing's refusal to bail out Evergrande is a clear signal. Simultaneously, the government is now actively involved in the company's management. Guangdong, the state-owned enterprise, announced last week that it will deploy a team to Evergrande to oversee "regular" operations.
The Kaisa group, another Chinese developer, has also been rated "limited default" by Fitch. Experts predict that China's housing crisis will be unprecedented in scope, affecting many generations at the same time.
source: bloomberg.com
According to the newspaper, the Chinese government's efforts to avoid a financial crisis in the real estate sector are thwarted by a default by a prominent property developer. As of June, Evergrande owed $300 billion. Experts believe that a downgrading would put more pressure on the corporation. The developer's work, however, continues as long as the bankruptcy process is not initiated.
The Communist Party will not tolerate a significant accumulation of debt that threatens financial stability, according to the article, therefore Beijing's refusal to bail out Evergrande is a clear signal. Simultaneously, the government is now actively involved in the company's management. Guangdong, the state-owned enterprise, announced last week that it will deploy a team to Evergrande to oversee "regular" operations.
The Kaisa group, another Chinese developer, has also been rated "limited default" by Fitch. Experts predict that China's housing crisis will be unprecedented in scope, affecting many generations at the same time.
source: bloomberg.com
