Chinese real estate developer Evergrande Group, which is on the verge of bankruptcy due to huge debts, paid $83.5 million in offshor dollar bonds which due on the 23rd, which meet a grace period for interest payments.
Chinese media reported on the 22nd that Evergrande Group belatedly remitted interest on dollar bonds, which was due on the 23rd of last month, on the 21st, the previous day.
According to the media, Evergrande Group paid interest on unpaid dollar bonds to its trustee Citibank account in the U.S. to pay the bond owner.
As a result, Evergrande Group has avoided the default crisis that has raised concerns. The dollar bond has a 30-day grace period, which forced it to be officially recognized by credit rating agencies if interest was not paid back by October 23.
The Evergrande Group crisis has emerged as a destabilizing factor that shakes the Chinese economy, causing sluggish housing sales and credit cuts to real estate companies.
Failure to pay interest on dollar bonds due on the 23rd in full was feared to further freeze global investment in Chinese real estate companies as the “cross default” clause, which also considers other offshor dollar bonds of Evergrande Group as default.
In a related development, Deputy Prime Minister Liu He, who oversees China’s financial policy, announced on the 20th that he plans to properly deal with the default crisis of the Evergrande group, saying, “We can control real estate risks overall.”
Evergrande Group also agreed with creditors to extend the repayment deadline for dollar bonds, a subsidiary that has guaranteed debt, for more than three months until the previous day. It is said that it has issued additional collateral for dollar bonds that have expired earlier this month.
Evergrande Group will expire its 30-day grace period for paying $47.5 million in offshor bond interest on the 29th and $148.13 million on the 12th of next month.
Evergrande Group sighed for now, but if it fails to pay any of them, it cannot avoid cross default, so attention is being paid to whether the remittance will be made before the due date.
Shares related to Hengda rose more than 5% on the Hong Kong stock market on the 22nd as Evergrande Group sent interest on dollar bonds suspended on the 23rd.