Some creditors stated that they did not receive interest on bonds due in April 2022, April 2023 and April 2024.
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The money was to be in the accounts no later than Tuesday at 6:00 CEST. The company has not yet commented on this, it missed two payments in September.
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This means that investors face significantly higher losses when the 30-day protection period now available to Evergrande expires. The company owes more than $ 300 billion (6.6 trillion crowns) and other due liabilities are approaching.
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Refinitiv records show that Chinese developers will have to repay bonds totaling $ 101.2 billion next year.
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“We expect further outstanding liabilities if the liquidity problem does not improve significantly,” remarked the brokerage company CGS-CIMB. According to her, developers with a lower rating are having difficulty refinancing at the moment.
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Evergrande is the most indebted real estate company in the world, warns the Financial Times. The company owns over 1,300 development projects in more than 280 Chinese cities.
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Another Chinese developer, China Modern Land, is now trying to extend the maturity of its liabilities. The company said on Monday that it needed to postpone the maturity of short-term bonds in the amount of $ 250 million by three months.
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In recent weeks, attention has also turned to Sunac China Holdings, which has alerted the regional government that the real estate sector is on the verge of a “tipping point.”
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Although investors around the world are noticing mainly unpaid interest on dollar bonds issued by Chinese real estate companies, indicators of market developments show that fears of the spread of the disease and the slowdown in economic growth are growing.
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According to traders, however, the sale concerns rather riskier bonds.
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“The market is trading more rationally now. According to the differences in the quality and rating of individual companies, rather than the entire sector facing the sale, “said Michael Wong, head of CP Securities of Hong Kong.
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However, the cost of insuring the risk that China will not pay its obligations to creditors continues to rise. The price of five-year credit swaps, which investors most often use for these purposes, rose to 59 basis points.
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This is the maximum since last April. So if someone wants to fully insure a $ 10 million investment in Chinese government bonds, their annual insurance will cost him $ 59,000. That is 0.59 percent of the amount invested.
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