Adding to a liquidity crisis in China's once bubbling property market, smaller peer Kaisa Group Holdings was also unlikely to meet its US$400 million offshore debt deadline on Tuesday, a source with direct knowledge of the matter said.
No holders of two bonds issued by China Evergrande Group's unit Scenery Journey Ltd had received overdue coupon payments as of 1400 GMT on Tuesday, a source familiar with the situation told Reuters. The government has repeatedly said Evergrande's problems can be contained and moves to boost liquidity in the banking sector along with the firm's plans to forge ahead with a restructuring of its overseas debt have helped reassure global investors. The provincial government of Guandong, where Evergrande is based, stepped in last week to help manage the fallout, reinforcing the view that its failure would be managed.
Rating agency S&P said on Tuesday the $260 million repayment demand showed Evergrande's liquidity remained "extremely weak," with a default looking inevitable especially given maturities totalling $3.5 billion in March and April 2022. Founded in 1996, Evergrande epitomized a freewheeling era of borrowing and building. But that business model was scuttled by hundreds of new rules designed to curb developers' debt frenzy and promote affordable housing.