China Evergrande Group again failed to pay interest to international investors on three bonds due on Wednesday, Deutsche Marktscreening Agentur (DMSA) said in a press release.
The 30-day grace period ended today
According to DMSA, Evergrande is liable to make $148.13 million in interest payments by Wednesday – the end of the 30-day grace period – and yet, international investors, including itself, have not received any interest payment.
According to the German Market Screening Agency’s senior analyst Dr Marco Metzler, today’s default puts Evergrande only days away from an official collapse.
DMSA is preparing bankruptcy proceedings against Evergrande. As soon as a court opens insolvency proceedings, Evergrande will also be officially bankrupt – and that is only a matter of days. We’re already holding talks with other investors and would be pleased if they were to join our action group.
Evergrande has over $300 billion in liabilities
International market bonds account for $19 billion out of the total of over $300 billion Evergrande has in liabilities. In September, it already defaulted on interest payments on two bonds and on December 28th, another two will be due to pay $255 million in interest.
The news comes almost a month after DMSA confirmed in a study that Evergrande’s collapse will have repercussions for the global financial system. Metzler added:
While the international financial market has so far met the financial turmoil surrounding the teetering giant Evergrande with a remarkable basis confidence – one can also say: with remarkable naivety – the U.S. central bank Fed confirmed our view yesterday. In its latest stability report, it explicitly pointed out the dangers that a collapse of Evergrande could have for the global financial system.
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