China Evergrande, the troubled real estate giant, paid off debt on at least two of its bonds on Wednesday, a bondholder in the company said, a sign that it may once again be able to avert default.
Evergrande owes investors interest payments on three bonds, with deferral periods for these payments set to expire on Wednesday. Missing them will trigger a default that could ripple through the Chinese economy: With around $ 300 billion in debt outstanding, the company’s inability to pay its debts could potentially hurt banks, real estate developers and even homebuyers in the country.
Instead, the company has managed to jump from one deadline to the next, and fulfill its obligations at the last minute – but often without explaining how or even publicly revealing that it has done so. The company has tried to sell out parts of its empire to raise enough money.
In October, when Evergrande said it had shelved efforts to sell a $ 2.6 billion stake in the real estate services company to another developer, the company warned in a Hong Kong securities archive that there was “no guarantee” that it would be in able to meet their financial resources. obligations or negotiate an extension with their creditors.
On Wednesday, the company complied with its interest payment deadline for bonds maturing in 2022 and 2023, said the person, who spoke on condition of anonymity to discuss the matter.
It was not immediately clear whether it had paid on the third bond, which falls due in 2024, or whether all the investors in the other two bonds had received payment.
The company did not immediately respond to a request for comment.
This is a development story. Come back for updates.