Evergrande Buys Time. With No Money

Evergrande Buys Time. With No Money

Sentiment improved (at the margins anyway) on Wednesday after Evergrande's onshore property unit alluded to some manner of "resolution" around interest payments due Thursday on a yuan-denominated obligation. The filing raised more questions than it answered. The looming payment for a 5.8% 2025 bond was "resolved via negotiations off the clearing house," an exchange filing said. It wasn't immediately clear what that meant. Some suggested Evergrande may have worked out an agreement to defer paym
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4 thoughts on “Evergrande Buys Time. With No Money

  1. If people think the Fed and the US Treasury can’t withstand higher interest rates, China’s sensitivity is much more acute. Their economy won’t survive higher interest rates as that would burst their real estate bubble. Threading the needle indeed.

  2. It seems inevitable that the world moves towards the China-S, China Sea-African axis and the N. American Western Euro-Australian axis.
    Growth, and peace, will be tricky with current and forecasted demographic shifts.

  3. Simultaneous meltdowns in tech and real estate is likely not something Beijing is willing to entertain. I would venture a guess that this ‘resolution’ may be driven by Beijing itself. If the goal is to alleviate excess in the housing market, it’s conceivable they would negotiate with creditors quietly, without a public announcement, to avoid the perception they will come to the rescue if other firms collapse. That sort of action would be consistent with their ‘common prosperity’ narrative, as the general public would likely view a bailout as saving the rich from bankruptcy, rather than curbing systemic risks.

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