This weekend, the deadline for a $260 million bond loan with Evergrande as the guarantor expires, according to Bloomberg. Many creditors are now preparing for the possibility of non-payment, according to news agency sources.
China’s Evergrande and its subsidiary Tianji Holding Company are underwriters of $260 million in bonds from a company called Jumbo Fortune Enterprises, according to Bloomberg.
Now some of the creditors of this bond loan will gather to pay their claims if they don’t get paid, the news agency wrote, citing unnamed sources.
The bond loan expires this coming Sunday, October 3, according to data compiled by Bloomberg.
Since the deadline falls on a Sunday, it will usually be pushed back to the first next business day – that is, Monday.
The payment deadline could be significant for Evergrande, as Chinese authorities have previously required the company to settle premiums on its dollar bonds, Bloomberg writes.
Briefly explain the Evergrande crisis
Fear of collapse
Evergrande is the world’s most indebted homebuilder and has been disrupting the world’s stock exchanges lately.
The fear is that a potential collapse in the housing giant could spread further into China’s real estate sector, into the banking sector, and into the global economy and financial markets.
The question many experts have asked themselves is whether the Chinese authorities will step in to save the company, to prevent a ripple effect in the economy.
– What everyone is waiting for is whether the authorities will intervene. Most people settled with some form of restructuring. But for the Chinese authorities, it is important not to let them influence the market too much. That’s the balance the authorities in China are now considering, Danske Bank’s chief strategist Anders Johansen told E24 this weekend.
He thinks Evergrande will take time to resolve: – The threat is spillovers
Tranquility of Evergrande
The total debt owed to Evergrande is estimated at NOK 2,600 billion.
On Thursday last week, the deadline for paying the interest premium on the bond loan expired. There are still no signs of this batch arriving, and the company has yet to say anything about the deadline. The payment amounted to 83.5 million dollars, equivalent to 717 million kroner, according to a statement Bloomberg.
Since then, New Energy Vehicle Group, a subsidiary of Evergrande, has reported financial problems. They are not going ahead with plans to raise new capital, and the stock fell sharply earlier this week.
Shares in the parent company, for its part, are up, up just over 14 percent in the past five days. So far this year, Evergrande’s share is down just over 80 percent.
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