China Evergrande inched closer to the potential default that investors fear as an interest deadline expired without any announcement from the property giant whose mountain of debt has spooked world markets
Evergrande has promised to prioritise such investors and resolved one coupon payment on a domestic bond this week. But it has said nothing about the offshore interest payment that was due on Thursday or a $47.5 million payment due next week.
Only some $20 billion of Evergrande's debts are owed offshore. Yet the risks at home are considerable because of the risks to China's property sector, an vast store of wealth. However the Wall Street Journal said, citing unnamed officials, that authorities had asked local governments to prepare for Evergrande's downfall."Given the deliberate pace of Chinese policy making, the authorities may well choose to play for time," said Wei-Liang Chang, a macro strategist at DBS Bank in Singapore.
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