Evergrande Makes Surprise $83.5 Billion Offshore Bond Payment, Avoiding Last Minute Default

In a shocking revelation, China’s most indebted property developer has made a surprise last-minute interest payment on dollar bonds due October 23, avoiding— or at least postponing— what would have been a default of biblical proportions.

In a last-minute hail mary attempt to rescue itself out of what otherwise would have been one of Asia’s largest corporate defaults in history, Evergrande finally came up with the $83.5 million interest payment just a day ahead of the October 23 deadline. As reported by state-owned Securities Times, the money was submitted to a trustee in charge of the dollar bonds, which in turn will send the funds to the respective bondholders.

The majority of offshore bondholders were not anticipating Evergrande to take care of its offshore debt obligation ahead of the coupon payment deadline. Instead, markets were bracing for an official default, given that the real estate developer already missed several other dollar bond payments over the past several weeks.

Although Evergrande may have avoided bankruptcy for the time being, the company still faces over $300 billion in liabilities, while its real estate sales have been sent plummeting 97%. The real estate developer has also failed to materialize several asset sales that would have otherwise heeded much-needed liquidity, and has numerous other coupons and maturities due over the next several months.

Information for this briefing was found via the Securities Times. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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