![]() ![]() It has $500 million in bond coupons due by year-end, followed by a $2-billion dollar bond maturity in March.Īnalysts have said the potential Evergrande deal signals the company was still working to meet its obligations. The $5 billion Evergrande is likely to get from the reported unit stake sale would theoretically cover its near-term offshore bond payments. “This will be a vicious cycle for the developers that are not strong enough because there is not enough liquidity in the market for everyone.” “Since the Evergrande crisis, investors have become more worried and focused about Chinese developer’s repayment ability,” said Thomas Kwok, head of equity business at Hong Kong brokerage Chief Securities. The liquidity issues have increased as many developers were not able to issue fresh debt to refinance, and as their ability to raise cash from selling properties dropped because of new regulations, he said. Sinic declined to comment on the ratings downgrades. S&P Global Ratings also lowered its rating on the company, saying it had run into “severe liquidity problems and its debt-servicing ability has almost been depleted.” It said the company was likely to default on its notes due on October 18. Sinic’s long-term issuer default rating was cut to ‘C’ from ‘CCC’, and came after the company announced that certain subsidiaries have missed interest payments on onshore financing arrangements, Fitch said in its report on Tuesday. ![]() While investors awaited confirmation of the Evergrande stake divestment, Chinese developer Sinic Holdings became the latest to be downgraded by Fitch Ratings on uncertainty over the repayment of its $246 million bonds maturing Oct 18. Evergrande Property Services Group also requested a halt referring to “a possible general offer” for company shares.Ĭhina’s state-backed Global Times said Hopson Development was the buyer of a 51% stake in the property business for more than HK$40 billion ($5.1 billion), citing unspecified other media reports.Įvergrande declined to comment ahead of an official announcement, as trading in the company’s shares remained suspended on Tuesday. The possible collapse of one of China’s biggest borrowers has triggered worries about contagion risks to the property sector in the world’s second-largest economy, as its debt-laden peers are hit with rating downgrades on looming defaults.Įvergrande on Monday requested a halt in the trading of its shares pending an announcement about a major deal. The company last month missed making coupon payments on two dollar bond tranches. Worries about rising debt defaults by Chinese property developers sapped investor sentiment on Tuesday amid fresh credit rating downgrades and uncertainty about the fate of China Evergrande Group as it scrambles to raise cash by selling assets.Įvergrande is facing one of the country’s largest-ever defaults as it wrestles with more than $300 billion of debt. ![]()
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