China: Evergrande reported to have creditor approval to restructure its offshore debt | Forexlive
Bloomberg (gated, but this link to the news seems to be accessible) carries the news that the world’s most indebted property developer has reached an agreement with a group of major creditors for a plan to restructure its offshore debt.
- an ad hoc group of offshore bondholders has expressed support for China Evergrande Group’s plan
- restructuring support agreement was being drafted
- includes a debt-to-equity swap option
- amortisation arrangement in a debt extension
The report cites unnamed “people familiar with the matter”.
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As a refresher,
- China Evergrande Group is one of the largest property developers in China
- It has more than 1,300 real estate projects spread across more than 280 cities
- Its debt burden topped USD$300bn
- In September 2021 Evergrande started missing payments on its bond obligations
- This worsened in October 2021 and in the months following
- Not only did the contagion spread to other property sector firms Evergrande’s shares collapsed, spreading panic in Chinese, and global, financial markets
As the crisis stabilised China’s government pumped in stimulus and support measures for the property sector. The benefits of this are slowly coming to fruition, which will benefit China’s economy more widely. The property sector is a key part of the domestic economy.