Thread: Chinas Evergrande is on the brink of default

During the housing meltdown, there were clear warnings in hindsight years before it happened.

Fast forward to today and the cheerleaders told us 48 hours after the news broke that, "It's a China problem, it won't affect global markets." I thought it was a global economy? Anyway, just because "markets were up" a few days later, doesn't mean it's over.

China Evergrande has got a demand under a $260 million guarantee obligation, the company said on Friday, adding it may be unable to repay due to a liquidity crisis that has gripped China's property sector.

https://www.reuters.com/markets/rate...nd-2021-12-03/

Evergrande downgrade forces BlackRock and other institutions to write-off billions

After Fitch Ratings downgraded China Evergrande and some of its subsidiaries to “Restricted Default” status on Thursday, there was for the first time, widespread acknowledgement of the Chinese property giant’s failure to meet its debt obligations.

“The downgrades reflect the non-payment of coupons due 6 November 2021 for Tianji’s USD645 million 13% bonds and USD590 million 13.75% bonds after the grace period lapsed on 6 December.

What’s next for China Evergrande?

While Evergrande has officially been labelled a defaulter by one of the world’s most respected and most powerful ratings agencies, the company is yet to default in any offical legal sense.

From here, if Evergrande’s directors respect and acknowledge Fitch Ratings’ view, the next step would be for them to file for insolvency, which would see the company liquidated.

https://www.asiamarkets.com/evergran...-off-billions/

"Evergrande doesn't matter." - Said most people on the internet.

Goodbye March 2020 lows in FXI.

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