Chinese real estate giant Evergrande makes bond coupon payment of $ 35.9 million and calms market

Chinese real estate giant Evergrande makes bond coupon payment of $ 35.9 million and calms market

Chinese real estate giant Evergrande makes bond coupon payment of $ 35.9 million and calms market

Insolvent real estate giant China will make a bond coupon payment of $ 35.9 million.

The main unit of the China Group, Hengda Real Estate Group, said in a statement on Wednesday that it would settle the coupon payment for its 5.8 percent September 2025 onshore bond traded in Shenzhen punctually on Thursday, September 23rd.

The coupon payment is 232 million yuan ($ 35.88 million), according to Refinitiv. Evergrande will pay its onshore bond on time, but the company has not yet announced whether it will be able to pay $ 83.5 million in interest, also due Thursday, on its March 2022 offshore bond.

Evergrande Chairman of the Board of Directors Hui Ka Yuan was already confident on Tuesday: “I am firmly convinced that Evergrande will get out of its darkest moment with your commitment and hard work and that the construction work will fully resume as soon as possible.” wrote Hui in one. Evergrande will meet its obligations to property owners, investors, partner companies and banks.

The good news provided some relief to nervous markets fearing that a default by China’s second largest construction company could affect the global financial system. Evergrande is so intertwined with the Chinese economy in general that fears of contagion have kept the financial markets in suspense. The topic also dominates the demand side in the crude oil market. China is also one of the largest consumers of oil. Oil prices rose in early trading on Wednesday. In the morning, a barrel (159 liters) of North Sea Brent cost 75.24 US dollars. That was 88 cents more than the day before. The price of a barrel of the American WTI variety rose by a similar rate to $ 71.37.

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Evergrande is in arrears with its creditors. Analysts of the warned of risks for the entire financial system in China, but do not foresee a “Chinese Lehman moment”.