Evergrande to erase the clouds of fears amongst the investors said that it has struck a deal with bondholders to settle interest payments on a domestic bond, said the various.
China’s central bank also infused 90 billion yuan ($14 billion) into the banking system, as a precautionary move since the country’s financial markets were closed for two days for the Mid-Autumn festival.
In a Shenzhen exchange filing, Hengda Real Estate Group Co Ltd said the company would duly settle the coupon payment on its Shenzhen-traded 5.8% September 2025 bond on time on Thursday.
No further details were furnished and it was unclear whether the offered suggestions improved Evergrande’s financial health or progress towards a restructure.
The company is supposed to pay 232 million yuan ($36 million) in interest on the bond by Thursday.
Evergrande will pay off its onshore bond payment on time, but China’s number two property developers have not categorically mentioned whether it is in a position to pay $83.5 million in interest due on its March 2022 bond on Thursday. The company is also due to pay $47.5 million on Sept. 29 for March 2024 notes.
Once China’s top-selling developer, now has debts of about $300 billion, mostly to onshore investors.
“We are still trying to understand what this payment means for the other bonds,” said a source familiar with the situation who spoke to the media on a condition of anonymity.
“But I imagine they would want to stabilise the market and make other coupon payments, given the close scrutiny.”
Analysts are downplaying the chance that there is a chance of a “Lehman moment“, or liquidity crunch, which freezes the financial set-up globally.
“The PBOC’s (People’s Bank of China) cash injection suggested some official attempts to contain the crisis”, said Yasutada Suzuki, head of EM investment at Sumitomo Mitsui Bank in Tokyo.
“I suspect that is to deal with any concerns about Evergrande and it shows the PBOC is trying to support the (money) market,” he said.
Evergrande’s shares showed a little improvement as the company is taking steps to settle debts. The stock lost 0.44% on Thursday as compared to a loss of 10.24% on Wednesday.
The stock of the company also fell in Tokyo, Singapore and Taipei on 21 September.