China's Evergrande Again Misses Payment on 170 Billion Won Bond Interest Due Today

[Image source=EPA Yonhap News]

[Asia Economy Reporter Kim Suhwan] Market anxiety is growing as Evergrande Group (恒大·Evergrande), China's second-largest real estate company facing bankruptcy, is expected to miss bond interest payments for the third time.

According to major foreign media on the 12th, Evergrande reportedly failed to pay $148 million (approximately 170 billion KRW) in bond interest due by that day, intensifying the bankruptcy crisis.

Originally, Evergrande was supposed to pay the bond interest by 1 PM Korea time on that day, but bondholders reportedly received no contact from Evergrande, according to major foreign media.

Previously, Evergrande failed to properly pay dollar bond interest scheduled on the 23rd and 29th of last month.

If Evergrande fails to repay the unpaid bond interest during the grace period ending on the 30th, starting from the 23rd of last month, it will face an official default (debt default) situation.

Amid this growing liquidity crisis, trading of Evergrande Group and Evergrande Property Services, the real estate management division of Evergrande, was temporarily suspended on the Hong Kong stock exchange on the 4th.

Global securities firm CGS-CIMB warned, "If the current situation does not improve, we will see more defaults."

As Evergrande continues to miss bond interest payments, there is analysis that the Evergrande-originated crisis is spreading to other Chinese real estate companies.

Foreign media reported that all of the 'Top 5' ETFs with the largest decline in returns listed on the Shanghai Stock Exchange this morning were ETFs issued by Chinese real estate companies.

In particular, mid-sized Chinese real estate companies such as Modernland and Scenic Holdings requested extensions on debt repayments, indicating that the liquidity crisis is spreading throughout the Chinese real estate industry.

On this day, Scenic Holdings' bond yield exceeded a record high of 1380%. Since bond prices and yields typically move in opposite directions, the surge in bond yields indicates that the bonds have effectively become 'worthless.'

Also, Modernland's stock price traded at a record low of 0.46 Hong Kong dollars, down about 1% that day.

This content was produced with the assistance of AI translation services.