Evergrande has allegedly made another payment, avoiding default once again

The indebted company paid interest on a dollar-denominated bond that matured at the end of September, just as a 30-day grace period expired, according to the New York Times and Bloomberg. Each publication cited unidentified sources.

CNN Business could not independently verify that the payment had been made, and Evergrande did not immediately respond to a request for comment. The interest owed was worth $ 47.5 million for a bond maturing in March 2024, according to data from Eikon Refinitiv.

Friday’s reports come a week after Evergrande reportedly paid $ 83.5 million in past due interest on a dollar bond, also shortly before the grace period expired.

It is unclear where Evergrande gets the money to pay off these debts. But some media have suggested that the company’s president, Xu Jiayin, is being pressured to put his hand in his pockets to keep it afloat.

Earlier this week, Bloomberg reported that Chinese authorities have told Xu to use his personal assets to pay the company’s debts.
Local media in Hong Kong He has also reported, citing information from a local land registry, that Xu is using a mansion in the city as collateral to obtain bank loans.
CNN Business could not independently verify those reports. But that property is located in an incredibly expensive neighborhood in Hong Kong. Neighboring houses They are priced at around 700 million Hong Kong dollars ($ 90 million).

Evergrande’s mainland China division, Guangzhou Kailong Real Estate, also yielded six million shares, worth 15.48 million yuan ($ 2.4 million), in a Shenzhen-listed development group called China. Calxon Group on Tuesday, according to a stock exchange document from that company. Evergrande still owns about a fifth of that company through Guangzhou Kailong.

However, Evergrande still owes enormous debt. Its total liabilities are around $ 300 billion. And the company still has $ 148 million in unpaid interest that was due last month.

The company also has a few hundred million dollars in payments this year, including an interest payment of $ 14.25 million on a dollar bond due tomorrow, according to Eikon Refinitiv.

Evergrande shares fell 3% in Hong Kong on Friday.

Beijing Says It's Time For Businesses To Pay Off Their Debts Abroad As Evergrande Fears Linger

An Evergrande flaw it would likely trigger cross-defaults and send shockwaves to other parts of the Chinese economy.

Fears about the Evergrande contagion have unstable global investors on in recent months, prompting the sell-off of shares in Hong Kong, New York and London.

Yields on offshore bonds issued by Chinese companies have also skyrocketed, making it more difficult for those companies to raise money.

And several smaller Chinese developers have defaulted its overseas debts in recent weeks, including Shenzhen-based Fantasia Holdings and Beijing-based Modern Land.

“Access to finance for Chinese property developers has narrowed … significantly and rapidly in recent weeks, as banks and bond investors have become nervous about real estate,” analysts at Moody’s. wrote in a report Thursday.

They added that property sales have also declined due to limited developer spending and homebuyer concerns about whether the properties will be completed.

Beijing appears to be taking note of the risks of failing to meet foreign debt obligations.

On Tuesday, Two major economic regulators asked companies “in key industries” to redeem the principal and interest on their bonds abroad. The agencies said they want companies to pay off foreign debt to protect their own reputations, as well as the “general order of the market.”


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