China Evergrande shares hold steady after debt default

FILE PHOTO: China Evergrande Group headquarters in Shenzhen
FILE PHOTO: The logo of China Evergrande Group is seen on the property developer’s headquarters in Shenzhen, Guangdong province, China, September 26, 2021. REUTERS / Aly Song / File Photo

December 8, 2021

HONG KONG (Reuters) – China Evergrande Group held steady on Wednesday after it missed payment deadlines on several US dollar bonds, putting it at risk of becoming the country’s biggest default. China, but large reductions were limited amid hopes of a managed debt restructuring.

Any explosion of Evergrande has so far been widely contained in China, and with policymakers becoming bolder and the market more familiar with it, market observers said. In this regard, the consequences of its troubles are less likely to be widely felt.

Evergrande’s failure to pay $82.5 million in interest due last month will trigger https://www.reuters.com/markets/rates-bonds/whats-next-china-evergrande-after-missing-coupon -payments-2021-12 -07 cross defaults on about $19 billion of its international bonds, with the potential to affect the country’s broader economy and beyond.

Shares of Evergrande rose early in trading and were up 1% at 01:50 GMT at HK$1.85.

Earlier, on Wednesday, trading in shares of related smaller rival Kaisa Group Holdings was suspended after a source with direct knowledge of the matter said it was unlikely to meet the deadline. $400 million in foreign debt due on Tuesday.

Evergrande used to be China’s leading real estate developer with more than 1,300 real estate projects. With $300 billion in liabilities, it is at the heart of an asset crisis in China this year that has crushed nearly a dozen smaller companies.

The government has repeatedly said Evergrande’s problems can be brought under control and moves to boost liquidity in the banking sector along with the company’s plans before restructuring its overseas debt. helped reassure global investors.

Last week, the government of Guandong province, where Evergrande is headquartered, stepped in to help manage the fallout, reinforcing the view that its failure would be managed.

(Reporting by Anne Marie Roantree and Donny Kwok; Editing by Christopher Cushing and Stephen Coates)

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Bobby Allyn

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