New York’s credit rating agency S&P dumps Evergrande into default

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New York’s credit rating agency S&P dumps Evergrande into default

S&P Global Inc., the New York-headquartered American multinational credit rating agency, had officially branded the beleaguered Chinese real estate tycoon Evergrande as a “selective default” on Friday, as the second-largest real estate entity in China, which has reportedly been handing out discounted properties to retail investors in exchange of bond coupon repayments, had been clinging on to the brink of an imminent collapse following multiple credit defaults.

In point of fact, ‘Selective default’ refers to a term in which a firm or a financial entity that belongs to a firm had missed repayments on bond coupons, but had not missed payments on all of its bonds. Evergrande was reportedly paying off parts of its US Dollar-denominated bond repayments to Chinese investors in local currency.

Meanwhile, citing the Chinese real estate industry behemoth’s missed payments on several US Dollar-denominated bond coupons, S&P Global Inc said in a statement on Friday, “We assess that China Evergrande Group and its offshore financing arm Tianji Holding Ltd.

have failed to make coupon payments for their outstanding U.S.-dollar senior notes. Evergrande, Tianji, or the trustee have made no announcement or any confirmation with us on the status of the coupon payments”.

S&P slumps Evergrande’s credit rating to default, shares sour

Aside from that, followed by S&P Global Inc statement, shares’ prices of Evergrande which had tumbled as much as 89.40 per cent over past twelve months and an eye-propping 88.54 per cent year-to-date, had closed out the week 8.99 per cent lower to HK$1.62 per share.

On top of that, S&P Global Inc also had told in a statement that the 26-year-old Shenzhen-headquartered real estate industry mogul, ranked 122nd on Fortune Global 500, had requested to withdraw the rating.