Struggling Chinese developer delays bond payment


BEIJING (AP) – A struggling Chinese developer whose struggle to avoid a multibillion-dollar default rocked global financial markets made a $ 45.2 million overdue payment on a bond one day Friday before it was declared in default, a newspaper reported.

Evergrande Group made payment on a $ 951 million bond due March 2024, The South China Morning Post reported, citing unidentified sources.

Friday marked the end of a 30-day grace period after Evergrande missed a payment due on September 29. It was the second time the developer, who owed 2,000 billion yuan ($ 310 billion), paid bondholders a day before he was declared in default. .

Evergrande’s struggle to comply with tighter official restrictions on borrowing has raised fears that a default could trigger a financial crisis. Officials have tried to allay investor fears by saying debt problems can be brought under control and there should be no impact on the financial sector.

The ruling Communist Party is urging companies to reduce debt levels it considers dangerously high.

Economists say Beijing can prevent a credit crunch if Evergrande defaults on debts to Chinese banks and bondholders, but wants to avoid appearing to be organizing a bailout as it tries to forcing other businesses to depend less on borrowed money.

A construction slowdown helped depress China’s economic growth to a surprisingly low 4.9% from a year earlier in the three months ending in September. Forecasters expect growth to slow further if the funding brakes remain in place.

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