China’s economic planning agency has encouraged national companies to repay their international debt a few days before another payment deadline for real estate developer Evergrande, after barely avoiding last week’s default.
The National Development and Reform Commission (National Development and Reform Commission) said late Tuesday that businesses need to be prepared to pay offshore bond principal and interest to maintain their reputation and market order.
The agency didn’t mention the company by name, but the announcement was made by Evergrande, a developer with more than $ 300 billion in debt and who began to embody concerns about the sector. Last-minute interest payments With Friday offshore bonds.
The company’s number of peers has been the default in recent weeks. Modern Land is an official filing in Hong Kong on Tuesday, Payment failed $ 250 million interest and principal payable the day before, following defaults from Fantasia When Cynic this month.
Many expect Evergrande to need one of the biggest restructuring processes in China’s history, and delays in its payments cast doubt on Beijing’s stance behind the scenes. If you do not transfer, the official default will be marked after the 30-day grace period has expired.
“The majority of investors have to do nothing for the evergrande group [will] One Hong Kong-based investor pointed out other looming payment deadlines, adding that the default is “still a basic case.” He did not expect the government to be directly involved, but said that “policies and guidelines may be further relaxed.”
Chinese real estate developers make up the majority of all borrowing in the Asian high-yield bond market, and yields have skyrocketed in the past month.Companies are under pressure from the so-called government “Three red lines” policyWas designed to limit access to debt and was introduced to avoid over-borrowing in the fear of an asset bubble.
However, the industry-wide rise in defaults, which shrank in the third quarter for the first time since the pandemic began, adds to the challenge for policy makers.
Evergrande, which will end another grace period due to a payment omission this Friday, has not provided the official exchange declaration or statement regarding payments to bondholders, first reported in the Chinese national media. The investor then confirmed that the funds had been received by the Financial Times.
The company is on Sunday Resume work In some of the projects that were canceled due to late payments to the supplier.
The Chinese government has not outlined its exact role in the Evergrande situation, but suggests that bailouts are unlikely.People’s Bank of China officials this month Blame the company He said that because of that predicament, and any spillover to the financial system is “controllable.”
The Hang Seng Index, a mainland developer who has lost a quarter of its value in the last six months, rose 0.1% on Wednesday following the announcement of the NDRC.
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