September 30, 2021

Evergrande Fails to Pay Bond Interest, Foreign Investors Will Lose Big?

 Evergrande once again missed out on making bond interest payments this week causing outside investors to face huge losses when the grace period will end in 30 days.

Trapped in a $ 305 billion debt crisis, Evergrande still failed to pay $ 47.5 million in interest on bonds that were supposed to be repaid on Wednesday, after missing out on a $ 83.5 million coupon payment last Thursday.

With liabilities equivalent to 2% of China’s Gross Domestic Product (GDP), Evergrande has raised concerns that the problem will affect the global financial system.

The Central Bank of China (PBOC) took immediate action to help Evergrande protect the interests of home buyers last week by injecting liquidity into its financial institutions.

However, the developer’s silence about its obligation to pay to outside investors has caused them to wonder whether it will incur huge losses when the grace period ends.

So far, some offshore Evergrand bondholders have still not received interest payments or any developments when the payment period ended yesterday.