China Evergrande Shares Plunge 11% to Lowest Since July 2015
(Bloomberg) -- Shares of China Evergrande Group plunged as much as 11% to their lowest since July 2015, on continued concerns over the financial health of the indebted developer.
The tumble Thursday came a day after the company’s stock briefly fell below its 2009 initial public offering price amid a further downgrade by Fitch Ratings. Late on Wednesday, REDD reported that the company plans to suspend interest payments on loans from two banks due Sept. 21. and asked a lender to wait for instructions about an extension plan.
The world’s most indebted developer has become one of the biggest financial worries in China, given its teetering pile of $305 billion in liabilities to banks, shadow lenders, companies, investors, vendors and home buyers. Moody’s Investors Service on Tuesday cut Evergrande’s credit rating by three notches, its third downgrade of the real estate giant since June.
Investor concerns about a possible payment failure at Evergrande have prompted big declines in the firm’s bonds in recent weeks and triggered fears about contagion risk in the broader credit market.
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