Eventually Lehman arrived in China. Eveergrande defaults on interest
According to Bloomberg, Chinese authorities have informed major lenders that China Evergrande Group will not make payments on next week's loans, which brings the already cash-strapped developer closer to China's "Lehman Moment". days, if not hours ".
According to Bloomberg, citing unnamed sources, the Ministry of Housing and Urban-Rural Development confirmed to banks at a meeting this week that Evergrande will not be able to pay its debts due on September 20. remaining circular will be used to terminate existing projects.
And since the non-payment of interest and principal will represent an event of default, the company is unlikely to make any subsequent payments of interest, or principal, as it will already default even though Bloomberg states that “Evergrande is still discussing the possibility of obtaining extensions and renew some loans ". Too bad that at least one of these expires next week and is unlikely to be renewed.
Meanwhile, as previously reported, Chinese authorities are already laying the groundwork for a $ 300 billion debt restructuring of the company that recently hired Houlhan Lokey to advise it during its upcoming historic bankruptcy. The government responded by bringing together accounting and legal experts to review the group's finances. The government seems willing to make investors and bondholders suffer large losses, without any bailout. Countless investors and creditors who have stormed the company's offices across the country and even gathered at its headquarters, demanding the company "return their money". It will not happen and they will end up like the Chinese version of the shareholders of the Italian “Resolved” banks.
The company's complex web of obligations to banks, bondholders, suppliers and homeowners has become one of the largest sources of financial risk in the world's second largest economy.
Chinese banks and real estate firms plummeted after Bloomberg reported delayed payments, while Evergrande's dollar bonds and stocks hit session lows Wednesday afternoon, following Bloomberg's report, as bond investors are bracing for missed payments and while Moody's and Fitch both downgraded Evergrande this month, citing an increased likelihood of default.
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The article Eventually Lehman arrived in China. Eveergrande defaults on interest from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/alla-fine-lehman-e-arrivato-in-cina-eveergrande-fa-default-sugli-interessi/ on Wed, 15 Sep 2021 19:27:08 +0000.