All eyes on China Evergrande, Kaisa as indebted mainland developers face bond repayment deadlines
- Evergrande has expressed its inability to repay interest on two offshore bonds
- Evergrande has until midnight on Monday to repay US$82.5 million in overdue interest on two offshore notes, while Kaisa’s US$400 million bond matures on Tuesday
All eyes are once again on embattled Chinese developers, as they face bond repayment deadlines on Tuesday.
Evergrande, which has entered debt restructuring under the watch of the Guangdong provincial government, said last Friday that it may not be able to fulfill its pledge to guarantee payment on a US$260 million bond. It has until midnight on Monday to repay US$82.5 million in overdue interest payments on two offshore notes. Evergrande missed the payments on November 6 and had a 30-day grace period to come good on its dues.
Meanwhile, Kaisa has a 6.5 per cent, US$400 million bond maturing on Tuesday. Kaisa will have officially defaulted if its fails to wire the money to its bondholders on time as there is no grace period.
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“If Kaisa defaults, it is highly likely that the Guangdong provincial government will send a working group to the company to oversee its restructuring like it did with China Evergrande,” said Zhou Chuanyi, a credit analyst with Singapore-based Lucror Analytics. He said that it was possible as Kaisa was involved in many government-backed urban renewal projects.