Evergrande has officially been labeled a defaulter for the first time,
... the latest milestone in months-long financial drama that paves the way for a massive restructuring of the world’s most indebted developer.
Fitch Ratings cut the developer to restricted default over its failure to meet two coupon payments after a grace period expired on Monday
Beijing’s reluctance to bail out Evergrande sends a clear signal that the Communist Party won’t tolerate massive debt build-ups that threaten financial stability.
Bloomberg 9 december 2021
‘The risk caused by a few real-estate firms in the short run would not undermine the market for the medium and the long run,’ said Yi Gang, governor of the People’s Bank of China.
“Companies issuing bonds overseas and their shareholders will be urged to properly handle their debt issues and meet their debt obligation in accordance with law and market principles,” he said. “This is a market event. It should be handled in the market-oriented way, based on law.”
“The rights and the interest of creditors and shareholders will be fully respected, in accordance with their legal seniorities,” the central banker said.
WSJ 9 December 2021
Evergrande and Kaisa Default!
https://www.youtube.com/watch?v=jyvMx96zcdc
Fitch also stated on Thursday that Kaisa, another heavily indebted developer that failed to repay a $400m bond that matured on Tuesday, was in restricted default.
Evergrande’s international bond markets, where it has about $19bn outstanding, compared with $12bn for Kaisa.
FT 9 December 2021
https://www.ft.com/content/6d6b1f79-52b3-49e5-aa8a-7068adec7a9d
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