The onshore bond coupon due on China Evergrande Group was paid on Tuesday. Sources on the pretext of anonymity said that. It has come during the possible offshore default that would have taken place due to the cash-strapper developer.
Evergrande’s flagship unit Henga Real Estate Group, has paid the funds required to pay. It was an onshore bond coupon worth USD 19 million.
As per experts, Evegrande should prioritise its limited funds and look into domestic markets, where stakes are a lot for the country’s financial system.
The liquidity crisis of Evergrande is more than USD 300 billion. It has to pay that much debt and has already missed a series out of them. The number 2 developer of China has roiled the global market. It has witnessed several stock markets plunging to new lows. The high yield bonds have seen the biggest hammering that Chinese property developers issued.
Notably, they could make a bond due on 23 March 2022 go default even after they fail to pay the due of September 23 during a 30 day grace period. This would mean a big jolt on the company’s reputation.
However, the offshore bond market is responding on a positive note post the reassuring comment made by China’s Central Bank. In addition, the coupon payment by major developers also worked wonders.
Sunac China has also paid an unprecedented amount of USD 27.14 million on Tuesday. A source related to the company spilled the beans about the dues payment.
However, on the other side, when approached, the Sunac representative refused to comment on the matter.
Meanwhile, on Monday, the Kaisa Group had said that it paid a coupon due on October 16. The People’s Bank of China believed that the issues created by China Evergrande’s spillover were controllable, and the economy of China was doing fine.
Chinese developers’ bonds that witnessed the upward movement included 2024 bonds of Central China Real Estate. It climbed to over 44.843 cents which is a growth of 5 per cent.