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Evergrande Pays Delayed Interest on at Least Two Bonds


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© Bloomberg. The China Evergrande Group logo displayed atop the company’s headquarters in Shenzhen, China, on Thursday, Sept. 30, 2021. China Evergrande Group started returning a small portion of the money owed to buyers of its investment products, weeks after people protested against missed payments. Photographer: Gilles Sabrie/Bloomberg

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(Bloomberg) — China Evergrande Group has made at least two overdue bond interest payments, part of its biggest test yet since its debt crisis began. 

The company made at least two of three overdue interest payments on its U.S. Dollar-dominated bonds, according to people with knowledge of the matter. Its dollar securities remain at distressed levels as creditors brace for an eventual debt restructuring that could rank among the largest ever in China.

Investors had been waiting to see if the embattled developer would make coupon payments totaling $148.1 million for three dollar bonds before the end of 30-day grace periods Wednesday. Evergrande missed the initial interest deadlines last month, Bloomberg-compiled data show.

The affected bonds include a 9.5% note due 2022, 10% bonds due 2023, and its 10.5% note due 2024. 

The property giant pulled back from the brink of default in October by paying other coupons before the end of its grace period. But the crisis at Asia’s largest junk bond issuer is hardly over, as it grapples with more than $300 billion in liabilities. A string of other developers have also fallen into distress amid a crackdown on speculation and leverage following years of debt-fueled expansion. The contagion has even spread to other areas of the credit market.

On Monday, two holders of other dollar notes sold by a unit of China Evergrande said they hadn’t received payment for coupons that were officially due Saturday. Both of those coupons also have a 30-day grace period before any missed payment would be considered a default.

A representative for Evergrande didn’t immediately respond to a request for comment sent outside of normal business hours. 

Authorities have sought to limit the fallout from the wider property market distress, with the central bank injecting liquidity into the financial system. Chinese developers’ bonds and stocks rallied Wednesday after the Securities Times said authorities are likely to loosen controls for the nation’s real estate companies to issue local-currency notes, part of efforts to prevent a further deterioration in their financing.

But concerns persist. A string of defaults and downgrades in the property industry in recent weeks pushed yields on junk dollar bonds from Chinese issuers to the highest in at least a decade over 24%. 

©2021 Bloomberg L.P.

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