Evergrande misses third round of bond coupon payments, contagion frets rise

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Evergrande misses third round of bond coupon payments, contagion frets rise

On Tuesday, China’s cash-strapped real estate giant, Evergrande Corp., had again missed out $148 million in bond coupon repayments scheduled to be matured on April 2022, April 2023 and April 2024, remarking its third round of credit default in three weeks as property markets’ frets exacerbate over a potential ripple effect of a likely collapse of Evergrande, the world’s most indebted real estate developer which has a debt-load of more than $305 billion mostly to retail customers.

In factuality, a number of bondholders had said earlier in Asia-Pacific trading hours that they had yet to receive payments on coupons totalling $148 million due on GMT 0400, Tuesday, putting other investors at havoc-scale risks of digesting hefty losses by the end of a 30-day grace period.

Nevertheless, latest credit default on Evergrande’s wealth management unit came forth as the China’s second-largest real estate group had been failing to sell off sufficient number of properties to pay off its rising debt-load, while potential ripple effects of Evergrande seemed to be lurking over the horizon as a jawdropping upsum of a $101.2 billion in bonds issued by Chinese developers will be matured next year.

China’s Evergrande misses third round of bond coupon repayment

Aside from that, with trades of Evergrande stocks remained halted in Hang Seng, Mainland Shanghai market data had unveiled that the property firms which had issued exchange-traded bonds, had been among top losers over recent past, stoking frets of a fast-spreading Evergrande contagion.

Besides, addressing possibilities of more defaults ahead in global real estate market with sell volumes tumbling sharply amid a pandemic-induced stagnation in most part of Asia alongside a lag in refinancing prospects, brokerage firm CGS-CIMB wrote in a client note, “We see more defaults ahead if the liquidity problem does not improve markedly”.