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Evergrande: Chinese real estate company announces important interest payment


It is supposed to calm the financial market: Evergrande has announced the punctual interest payment of 35.9 million dollars for a bond. However, the group is keeping a low profile on other securities.

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Evergrande project in Beijing

Photo: Andy Wong / AP

The shaky Chinese real estate giant Evergrande wants to punctually meet an eagerly awaited interest payment to investors.

The bankrupt company will make a bond coupon payment of $ 35.9 million.

This was announced by the main unit of the China Evergrande Group, the Hengda Real Estate Group, in a statement.

Accordingly, she wants to pay the coupon on Thursday, September 23rd.

The interest is due on an onshore bond traded in Shenzhen that runs until September 2025.

Most bonds pay out regular interest payments, also known as coupons.

Both companies and governments issue bonds.

With these securities they get money on the capital markets.

At the same time, Evergrande did not comment on whether it will be able to pay the interest of $ 83.5 million, also due on Thursday, on its offshore bond from March 2022.

Still, the latest news has 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 keep the financial markets in suspense. The company has piled a mountain of debt worth more than $ 300 billion and has defaulted on its creditors. Citigroup analysts warned of risks for the entire financial system in China, but do not foresee a “Chinese Lehman moment”.

The rating agency Standard & Poor's assumes that the Chinese banking sector could cope with a possible collapse of the real estate giant without major turmoil.

According to the calculations, Chinese banks had invested around 400 billion yuan (52.6 billion euros) in the company at the end of June.

"A collapse of Evergrande as such would not destabilize the banking system," writes the rating agency.

Standard & Poor's warned that it could not be assumed that the group would be bailed out by the government.

Beijing would only be forced to intervene "if there were widespread contagion that would result in the collapse of several large construction companies and pose systemic risks to the economy," the agency said.

Evergrande chairman Hui Ka Yuan had promised that the company would meet its obligations to property owners, investors, partner companies and banks.

At the same time he wrote perseverance slogans for the employees.

"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," Hui wrote in a letter to the employees on Tuesday.

mmq / Reuters / dpa

Source: spiegel

All business articles on 2021-09-22

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