Will Evergrande miss its latest bond payment deadline?

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Evergrande Faces Potential Default as Bond Payment Deadline Looms

Some bondholders of China Evergrande Group have not received coupon payments by the close of Asia business on November 10, placing the developer back on the brink of default. A 30-day grace period for over US$148 million in payments on its April 2022, 2023, and 2024 bonds concluded on Wednesday, November 10. A failure to remit these funds would constitute a formal default and could trigger cross-default clauses on other Evergrande dollar bonds.
Unreceived Payments as Grace Periods Expire

As of the close of Asian business on November 10, certain bondholders had not received their coupon payments. This situation follows a pattern observed in late September, when payments for two separate offshore coupon obligations, due then, were only received by bondholders one working day after their respective 30-day grace periods had ended. The precise expiration time of the grace period on November 10 remained unclear, but sources indicated that payments had not been remitted by the end of the Asian trading day.
Significant Payment Obligations on Horizon

Evergrande faces further substantial payment obligations in the near future. On December 28, the company is due to make coupon payments totaling over US$255 million on its June 2023 and 2025 bonds. The developer's ongoing struggles with over US$300 billion in liabilities, including US$19 billion in international bonds, have created significant pressure.
Expert and Market Sentiments on Default Risk

Restructuring adviser Karl Clowry expressed an expectation that the funds would be paid, citing the immediate cross-default implications and broader market effects if a payment failure were to occur. He also pointed to potential upcoming easing of the "three red lines" policy, a set of financial requirements for developers, as a factor that could influence future financial flexibility. The market has shown concern, with the spread between Chinese investment-grade firms and US Treasuries widening to a five-month high, reflecting worries about the contagion effects of developers' financial distress.

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Will Evergrande miss its latest bond payment deadline?

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