Chinese real estate giant Evergrande barely defaults for the third time in 30 days – Economics Bitcoin News

In mid-September, the market value of China’s second-largest real estate developer Evergrande Group plummeted to an 11-year low, sparking concerns about the global economy. Global economists warned that if Evergrande’s debt defaults, it may trigger a credit contagion similar to the 2007 Lehman Brothers bankruptcy. So far, Evergrande has successfully avoided loan defaults three times in the past month, but Evergrande’s bondholder Deutsche Bank Marktscreening Agentur (DMSA) seems to be preparing to file for bankruptcy protection from the real estate giant.

The spread of credit from the real estate industry is imminent-Evergrande fluctuates, Zillow falters

There are problems in the global real estate market, and many incidents show that large companies dealing with real estate are struggling. With the global real estate market being squeezed, China’s Evergrande is only a small part of it. For example, the large real estate company Zillow disclose In the first week of November, the company will stop buying and renovating properties. In addition, since Zillow lost $304 million in the third quarter of 2021, Zillow laid off 25% of its employees.

China Evergrande has been wobbly, and people on Wednesday assumed The real estate giant will default on bond payments.According to a letter From the perspective of the bondholder DMSA, Evergrande failed to pay interest on schedule.Although the DMSA filed a claim and tried to get other bondholders to file for bankruptcy protection against the Chinese real estate company, a Clearstream representative Tell Bloomberg said that the company has received interest payments and Evergrande delayed its default.

The U.S. central bank warns that the Evergrande issue may pose a risk to global economic growth

This is the third time Evergrande has narrowly avoided breach of contract in the past 30 days, and DMSA is not the only related company complaining.Rival Kaisa Group is one of Evergrande’s largest bondholders and has already Ask for help From creditors and the Chinese government. No one knows whether Beijing will continue to help Evergrande, but in the past few weeks, the company’s executives have been meeting with Chinese regulators and government officials.

At the same time, the Federal Reserve warn If it is not dealt with as soon as possible, Evergrande’s plight may spread to the world, stating: “China’s pressure may put pressure on global financial markets through the deterioration of risk sentiment, posing risks to global economic growth, and affecting the United States.” When the DMSA was preparing for bankruptcy proceedings, the company’s senior analyst Marco Metzler issued a warning from the Federal Reserve.

Metzler emphasized: “Although the international financial markets have so far responded to the financial turmoil surrounding the faltering giant Evergrande with extraordinary basic confidence-it can also be said: very naive-the Fed confirmed our view yesterday.” “In its latest update. In its stability report, it clearly pointed out the danger that Evergrande’s collapse may pose to the global financial system,” said a DMSA representative.

In addition, the recently released Bloomberg report quoted a Maxis representative as well as two unnamed Evergrande bond holders. According to anonymous sources, Evergrande has distributed interest to them on Wednesday afternoon (Eastern Time). The source remains anonymous because “they are not authorized to speak publicly.”Evergrande’s distress has caused Speculators want to know Will the U.S. real estate market become the next recession, especially after Zillow’s problem and the country’s median house price surged more than 25% in five quarters.

What do you think of the problems faced by Evergrande bondholders and the possibility of credit contagion? Please tell us your thoughts on this topic in the comments section below.

Tags in this story

Bondholder, Bond, China, China Evergrande, China’s housing market, China’s real estate, Clear stream, Credit contagion, credit crisis, Debt default, default, DMSA, economics, Evergrande, Evergrande Group, inflation, Lehman Brothers, Kaisa Group, US, U.S. housing market, U.S. Real Estate, Zillo

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