China Tells Banks Evergrande Won’t Pay Interest Next Week

[Zeedox]

China Tells Banks Evergrande Won’t Pay Interest Next Week

Chinese authorities have told major lenders to China Evergrande Group not to expect interest payments due next week on bank loans, according to people familiar with the matter, taking the cash-strapped developer a step closer to one of the nation’s biggest debt restructurings.

www.bloomberg.com

All it takes is one domino to start the chain....

 

[Gomez Adams]

China Tells Banks Evergrande Won’t Pay Interest Next Week

Chinese authorities have told major lenders to China Evergrande Group not to expect interest payments due next week on bank loans, according to people familiar with the matter, taking the cash-strapped developer a step closer to one of the nation’s biggest debt restructurings.

www.bloomberg.com

All it takes is one domino to start the chain....

That reads exactly like the Fanny Mae/ Freddie Mac housing bubble of 2009.

 

[Hugo Stiglitz]

I've never heard of the company. Is it a Chinese only company or does it do shit here in the States?

 

[Gomez Adams]

It's China only to the best of my knowledge. Problem is that people invest in it and its projects from all over the world. With roughly 150 billion dollars in "assets", if it goes under it's going to take a lot of people down with it.

As Zee says, it only takes one to get the ball rolling. That one takes out two smaller ones that take out another big one and it just keeps gaining speed as it rolls downhill.

 

[Zeedox]

Evergrande employees in China held hostage as worried investors demand payments

Retail investors in China are taking drastic measures to get money back from embattled property developer. Read more at straitstimes.com.

www.straitstimes.com

Evergrande losers take company executives hostage

Via Straits Times: Footage of Evergrande’s management being held hostage in company offices by anxious retail investors made the rounds on China’s social media earlier this week. “I have with me Nanchang’s top Evergrande representative surnamed Chen,” said WeChat user Yang Qiwen, referring to...

www.macrobusiness.com.au

 

[Gomez Adams]

You know, I had compared this to the Fannie May / Freddie Mac debacle of 2008-2009. I think I'm wrong. I think this is more Enron the more I look at it.

First off, when reading the second article and the comments, I saw this:

Over the years Anne Stevenson-Yang would often use Evergrande as the poster child of the China property Ponzi. If you listen to any of her interviews she would always mention Evergrande. Of course, no one can time these things but the warning signs were there.​

​

So I just looked up their stock action. It's very, very odd indeed. First you have this:



So it lost 79% of it's value over the last 6 months. How does that happen? Well, let's look at the financials:



So their gross income was down 16%, which is a hard hit, but their net profit skyrocketed 163.67%.

So how in the name of all that is holy does 96.61% of your operating income VANISH INTO THIN AIR?!

That has Ponzi written all over it.

 

[Zeedox]

China Evergrande contagion concerns rile global markets

HONG KONG (Reuters) -Growing fears of China Evergrande defaulting rattled global markets on Monday as investors worried about the potential impact on the wider economy dumped Chinese property stocks and sought refuge in safe-haven assets. Shares in Evergrande, which has been scrambling to raise...

finance.yahoo.com

Evergrande is due to pay $83.5 million interest on Sept. 23 for its March 2022 bond. It has another $47.5 million interest payment due on Sept. 29 for March 2024 notes. Both bonds would default if Evergrande fails to settle the interest within 30 days of the scheduled payment dates.

In any default scenario, Evergrande will need to restructure the bonds but analysts expect a low recovery ratio for investors. Trading of the company's bonds underscored just how dramatically investor expectations of its prospects have deteriorated this year.

The 8.25% March 2022 dollar bond was traded at 29.156 cents on Monday afternoon, yielding over 500%, compared to around 13.7% at the beginning of year. The 9.5% March 2024 bond was at 26.4 cents, yielding over 80%, compared to 14.6% at the start of 2021.

Goldman Sachs said last week that because Evergrande has dollar bonds issued by both the parent company and a special purpose vehicle, recoveries in a potential restructuring could differ between the two sets of bonds, and any potential restructuring process may be prolonged.

 

[Zeedox]

Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus (Published 2021)

The Chinese property giant owes $300 billion and is on the hook for as many as 1.6 million apartments. It may owe tens of thousands of its employees money, too.

www.nytimes.com

When the troubled Chinese property giant Evergrande was starved for cash earlier this year, it turned to its own employees with a strong-arm pitch: Those who wanted to keep their bonuses would have to give Evergrande a short-term loan.

Some workers tapped their friends and family for money to lend to the company. Others borrowed from the bank. Then, this month, Evergrande suddenly stopped paying back the loans, which had been packaged as high-interest investments.

Now, hundreds of employees have joined panicked home buyers in demanding their money back from Evergrande, gathering outside the company’s offices across China to protest last week.

 

[Gomez Adams]

Yep. That has Ponzi written all over it. Robbing Peter to pay Paul and then stiffing Paul. I'd be watching the airports for fleeing executives.

 

[Hugo Stiglitz]

Evergrande Gave Workers a Choice: Lend Us Cash or Lose Your Bonus (Published 2021)

The Chinese property giant owes $300 billion and is on the hook for as many as 1.6 million apartments. It may owe tens of thousands of its employees money, too.

www.nytimes.com

Fucking idiots. Should have kept their money and walked away. That was literally like having a drug addict come to your door for the 5th time asking for 100 bucks for a fix and promising you it was the last time and he would pay you back. Yeah right. It was the last time the first time. Suckers.

 

[Gomez Adams]

And here we go:

Stocks tumble as Wall Street's fears turn to China

The Dow and the broader US stock market fell to close sharply lower Monday as Chinese real estate conglomerate Evergrande's debt crisis made American investors uneasy.

www.cnn.com

The White House said it is monitoring the markets, but stressed that Evergrande's business was "overwhelmingly centered in China."​

Evergrande, which is struggling to manage its $300 billion mountain of debt, was supposed to pay the interest on some of its bank loans Monday, according to Bloomberg. The company will also have to pay interest on two of its bonds worth more than $100 million later this week, according to Refinitiv.​

​

Shares of Evergrande fell more than 10% in Hong Kong.​

Why are global investors so worried about something that's happening in the Far East?​

Everything is connected in the world of financial markets and the massive amount of money borrowed by Chinese companies has long been considered a looming threat to market stability. Now investors fear the exposure that banks might have to Evergrande and companies like it.​

​

Adding a dash of melancholy, this crisis comes on the thirteenth anniversary of the collapse of Lehman Brothers.​

Let the games begin!

 

[Grimhogun]

Evergrande employees in China held hostage as worried investors demand payments

Retail investors in China are taking drastic measures to get money back from embattled property developer. Read more at straitstimes.com.

www.straitstimes.com

Evergrande losers take company executives hostage

Via Straits Times: Footage of Evergrande’s management being held hostage in company offices by anxious retail investors made the rounds on China’s social media earlier this week. “I have with me Nanchang’s top Evergrande representative surnamed Chen,” said WeChat user Yang Qiwen, referring to...

www.macrobusiness.com.au

Good for them! Fuck those executives. I would have hurled them out a widow equal to what they owed me. You owe me 30 grand your ass gets tossed out from the 30th floor. Fuck you!