ADVERTISEMENT

Evergrande Unit’s Bondholders Yet to Receive Coupon Payments

Evergrande Unit’s Bondholders Yet to Receive Coupon Payments

Two holders of dollar notes sold by a unit of China Evergrande Group are yet to receive payment for coupons that were officially due Saturday.

The developer’s Scenery Journey Ltd. unit had two dollar-bond coupons due Nov. 6: $41.9 million on a 13% note and $40.6 million on a 13.75% bond. Coupons that come due on holidays or over weekends may be paid by issuers at the end of the next business day. 

Both of the coupons in question have a 30-day grace period before any missed interest payment would be considered a default, according to a bond prospectus. 

The holders said they hadn’t received payment as of 6:15 p.m. Monday in Hong Kong. Evergrande didn’t immediately respond to a request for comment. 

Evergrande Unit’s Bondholders Yet to Receive Coupon Payments

The property giant pulled back from the brink of default in October by making payment on another coupon before the end of its grace period. That’s raised speculation that the company could take the same approach with the Scenery Journey note coupons. 

The crisis at Evergrande, Asia’s largest issuer of junk dollar bonds, has sparked contagion as yields on such securities from Chinese issuers jump above 22%, the highest in at least a decade. That’s effectively left other cash-strapped developers unable to issue new overseas notes to roll over debt, just as home sales drop. The developments have eroded confidence in the Chinese real estate market, which by some measures accounts for more than a quarter of the economy.

Evergrande’s dollar notes have remained at distressed levels as creditors brace for an eventual debt restructuring that could rank among the largest ever in China. 

©2021 Bloomberg L.P.

With assistance from Bloomberg