(Bloomberg) — China Evergrande Group has two more dollar-bond coupon payments due Tuesday, interest that investors aren’t expecting will be paid after the property giant failed to do so on other debt.
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The embattled firm has $50.4 million of interest due on a 7.5% 2023 bond and another $204.8 million tied to an 8.75% 2025 note, according to Bloomberg-compiled data. Evergrande has a 30-day grace period to deliver the payments before a default can be declared, according to a bond issuance document seen by Bloomberg News. That would begin Wednesday if payments aren’t made. The company had no immediate comment.
Two major international rating firms formally described Evergrande as a defaulter earlier this month, following coupon-payment failures on several dollar notes. The company has been straining under more than $300 billion of liabilities, a cash crunch over the past several months and recent plunge in new-home sales on concern about Evergrande’s future. It is working on a debt-restructuring plan that would be one of China’s largest ever.
Meanwhile, Evergrande said on Sunday it’s resumed construction on nearly all of its housing projects as the company races to complete thousands of apartments before 2022 arrives. Shares rose as much as 10% Tuesday morning in Hong Kong to start a holiday-shortened trading week, while the builder’s dollar bonds continued to be indicated below 20 cents on the dollar.
The head of China’s central bank said earlier this month that Evergrande’s debt woes will be dealt with in a market-oriented way, signaling Beijing’s reluctance to bail out the firm. The developer stated last week that a newly established risk-management committee is utilizing its extensive resources to defuse risk and protect the interests of all parties.
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