China’s Evergrande is heading to avoid default days before the deadline...


Posted in: 22/10/2021 – 08:57

                China's Evergrande Group has received money to make interest payments on dollar bonds, a source told Reuters on Friday, days before a deadline that would have plunged the troubled real estate developer into an official default expired.             

The source confirmed a report in the government-backed Securities Times newspaper on Friday that the company transferred $83.5 million in interest payments to an account at Citibank on Thursday, allowing it to repay all bondholders before a grace period expires on October 23.

The news of the repayment will bring some relief to investors and regulators, who are concerned about the broader implications of a chaotic default and contagion to global financial markets elsewhere, even though the company still needs to make payments on other debt maturities.

“They seem to be avoiding a near-term default, and it is a relief that they have managed to raise cash,” said a Hong Kong-based restructuring lawyer who represents some of the bondholders.

“But Evergrande still needs to restructure their debt. Perhaps the repayment is a way for them to get some support from the stakeholders before the hard work required on the restructuring,” he added.

Evergrande did not immediately respond to a Reuters request for comment. City declined to comment.

            




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