Evergrande Still Faces MAJOR Debt Obligations in Coming Years Despite ‘Resolving’ Thursday’s Interest Payment

Although markets exhaled a sign of relief upon news that Evergrande had come to an agreement with creditors regarding Thursday’s scheduled interest payment, the coast for the heavily-indebted real estate developer is not yet clear.

Markets around the globe were ecstatic to learn that Evergrande vaguely confirmed it will be making a 232 million yuan interest payment on September 23, sending futures significantly higher. However, the euphoria likely won’t last long, because the real estate developer still has a lot more debt obligations due.

For starters, Thursday’s payment suggests that Evergrande came to a consensus with local bondholders to postpone payments without declaring the move as a default. “Evergrande might have arrived at some kind of standstill with onshore holders,” said Bloomberg Intelligence credit analyst  Daniel Fan. “They might have asked them not to act, pending for negotiation for a rescheduling or something of that sort.”

However, the real estate developer still faces major interest obligations to offshore bondholders — to the tune of $83.5 million come September 23 on its 8.25% bonds due in 2022 to be exact. And, with those bonds falling 0.7 cents to trade around 24.5 cents, it suggests that creditors are still anticipating a major default.

The reality is, Evergrande’s problems are just beginning, because the company still owes billions of dollars to onshore and offshore creditors in the next coming years and months. In just the next three months alone, the company owes $669 million in interest payments before the end of the year, in addition to the $83.5 million in coupon payments due September 23.

In short, Evergrande just does not possess the means to continue making payment-by-payment arraignments with its numerous creditors until its debt fiasco is eventually resolved. Therefore, Evergrande’s sanguine announcement that it has come to a compromise regarding Thursday’s interest payment is only procrastinating on the inevitable.


Information for this briefing was found via Bloomberg. 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.

 

Video Articles

Why $50 Silver, $4000 Gold Might Be Closer Than Anyone Thinks | Bradley Langille – GoGold Resources

Why Silver’s True Price Could Be Much Higher | Joaquín Marias – Argenta Silver

Gold Enters A ‘Stronger For Longer’ Phase | Richard Young – i-80 Gold

Recommended

Emerita Resources Intersects Further Mineralization At El Cura, Expanding Deposit

ESGold Sees ANT Survey Reveal Vertically Continuous System To 1,200 Metres Depth

Related News

Elon Musk’s Taiwan Special Zone Idea: China Says Thanks, Taiwan Says Democracy “Not For Sale”

If US House Speaker Nancy Pelosi risked a potential escalation by visiting Taiwan, Tesla CEO...

Monday, October 10, 2022, 01:08:00 PM

Tesla’s China Sales Fall 27% in April, Worrying Investors

It appears that Tesla’s recent string of bad publicity has hurt its sales figures in...

Saturday, May 15, 2021, 03:17:00 PM

Donald Trump Orders Federal Employee Retirement Fund to Cease Investing in Chinese Equities

Tensions between China and the US were already at an all-time high much before the...

Wednesday, May 13, 2020, 09:26:38 AM

China Evergrande Group: The Crisis, Explained.

Evergrande. That topic you’ve heard about endlessly over the past weeks, yet haven’t taken the...

Saturday, October 2, 2021, 09:00:00 AM

Unseen Threat: China’s Commodities Stockpile Could Shake the World

Over the past two decades, China has consumed vast amounts of raw materials to support...

Thursday, July 25, 2024, 09:20:13 AM