Payment default threatens: Fitch downgrades real estate companies Kaisa and Evergrande – China does not want to help | news

—China’s government does not want to contribute to the rescue – and the rating agency Fitch downgraded the creditworthiness of the companies on Thursday and warned of a default. The Bonittswchter referred to reports that both groups had failed to meet recent payment obligations. Evergrande has more than $ 300 billion in debt. Because of the uncertainties, Kaisa shares were further suspended from trading on the Hong Kong Stock Exchange.

Despite the upheaval for the real estate industry, China’s central bank chief Yi Gang signaled that a state bailout is not planned. According to the central bank, the governor said Evergrande’s risks are a “market operation” that is appropriately managed “according to the principles of the market and the rule of law.” As a mature financial center, Hong Kong has an efficient system for addressing such problems.

According to his assessment, the “short-term risks of individual real estate companies” will not affect normal financing on the market in the medium or long term, Yi Gang was convinced. The central bank advocates a fair market environment. Companies and shareholders would have to deal appropriately with “their own debts” and protect the interests of the creditors in accordance with legal requirements and market regulations.

The rating agency Fitch downgraded Evergrande and Kaisa to “Restricted Default”, which means something like “restricted credit default”. The rating is only one step above the classification for default. Kaisa failed to repay a senior bond of $ 400 million as of Tuesday’s reporting date.

At Evergrande, Fitch complains about the lack of interest payments. These would originally have been due at the beginning of November. Fitch also said that no payments were made within the grace period up to Monday. Evergrande did not answer questions about the commitments: “That’s why we assume that they have not been paid.”

Evergrande itself warned of possible financial difficulties a week ago: After a financial review, no guarantee can be given that the group will have sufficient funds to meet its obligations. The authorities sent a working group to the company. A restructuring of the credit burdens is possible.

According to experts, the downgrading increases the pressure not only on companies, but also on the authorities to publish proposals for restructuring. The Chinese government has been taking action against real estate companies’ high indebtedness for months. By not coming to Evergrande’s aid, the message is reinforced that times have changed and that no one can hope for help from Beijing.

The central bank had also downplayed macroeconomic risks, accusing Evergrande of “poor management” and “reckless expansion”.

/lw/DP/stw

HONG KONG (dpa-AFX)