Fitch downgrades Evergrande as Chinese developer misses another payment
Evergrande sells bank stake for $1.5bn as Beijing prods government-owned firms to purchase debt-laden company’s assets
29 September 2021 - 18:23
byKanishka Singh
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
The China Evergrande Centre building in Hong Kong, China, September 23 2021. Picture: REUTERS/TYRONE SIU
Ratings agency Fitch said on Wednesday it had downgraded the long-term foreign-currency issuer default ratings (IDRs) of debt-laden Chinese home builder Evergrande Group and its subsidiaries, Hengda and Tianji.
The downgrades to “C”', from “CC”, reflect that Evergrande is likely to have missed interest payment on its senior unsecured notes and entered the consequent 30-day grace period before nonpayment constitutes an event of default, Fitch said.
Some of Evergrande’s offshore bondholders had not received interest payment by the close of Asia business hours on Wednesday, three people familiar with the matter said, missing its second dollar debt obligation this month.
The cash-strapped company was due on Wednesday to make a $47.5m bond interest payment on its 9.5% March 2024 dollar bond. It had missed paying $83.5m in coupon last Thursday.
Evergrande’s silence on its offshore payment obligations has left global investors wondering if they will have to swallow large losses when 30-day grace periods end for coupon payments due on September 23 and September 29.
A spokesperson for Evergrande did not have any immediate comment. Reuters was unable to determine whether Evergrande had told bondholders what it planned to do regarding the coupon payment.
Earlier on Wednesday, Evergrande said it planned to sell 1.75 -billion shares of Shengjing Bank for 9.99-billion yuan ($1.5bn). The shares, representing 19.93% of the issued share capital of the bank, will be transferred for 5.70 yuan apiece to Shenyang Shengjing Finance Investment, a state-owned enterprise involving in capital and asset management.
Beijing is prodding government-owned firms and state-backed property developers to purchase some of embattled Evergrande’s assets as the company teeters on the brink of collapse, people with knowledge of the matter told Reuters this week.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Fitch downgrades Evergrande as Chinese developer misses another payment
Evergrande sells bank stake for $1.5bn as Beijing prods government-owned firms to purchase debt-laden company’s assets
Ratings agency Fitch said on Wednesday it had downgraded the long-term foreign-currency issuer default ratings (IDRs) of debt-laden Chinese home builder Evergrande Group and its subsidiaries, Hengda and Tianji.
The downgrades to “C”', from “CC”, reflect that Evergrande is likely to have missed interest payment on its senior unsecured notes and entered the consequent 30-day grace period before nonpayment constitutes an event of default, Fitch said.
Some of Evergrande’s offshore bondholders had not received interest payment by the close of Asia business hours on Wednesday, three people familiar with the matter said, missing its second dollar debt obligation this month.
The cash-strapped company was due on Wednesday to make a $47.5m bond interest payment on its 9.5% March 2024 dollar bond. It had missed paying $83.5m in coupon last Thursday.
Evergrande’s silence on its offshore payment obligations has left global investors wondering if they will have to swallow large losses when 30-day grace periods end for coupon payments due on September 23 and September 29.
A spokesperson for Evergrande did not have any immediate comment. Reuters was unable to determine whether Evergrande had told bondholders what it planned to do regarding the coupon payment.
Earlier on Wednesday, Evergrande said it planned to sell 1.75 -billion shares of Shengjing Bank for 9.99-billion yuan ($1.5bn). The shares, representing 19.93% of the issued share capital of the bank, will be transferred for 5.70 yuan apiece to Shenyang Shengjing Finance Investment, a state-owned enterprise involving in capital and asset management.
Beijing is prodding government-owned firms and state-backed property developers to purchase some of embattled Evergrande’s assets as the company teeters on the brink of collapse, people with knowledge of the matter told Reuters this week.
Reuters
BlackRock and Bluebay exposed to Evergrande
China’s WeChat clamps down on Evergrande messaging groups
MAMOKETE LIJANE: China’s inability to deal with looming real estate crisis could spark global contagion
China steps up oversight of Evergrande property projects
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
WATCH: Evergrande crisis ensnares global markets
China’s Evergrande debacle is no ‘Lehman moment’, say analysts
Bitcoin and ether fall as market sell-off over Evergrande widens
China's Evergrande shares slump to 11-year lows on growing default fears
Evergrande debt restructuring is almost unavoidable
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.