China Tells Banks Evergrande Won’t Pay Interest Next Week


Resident Canadian
Dec 1, 2020
Canada's Ocean Playground

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

All it takes is one domino to start the chain....
That reads exactly like the Fanny Mae/ Freddie Mac housing bubble of 2009.
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I've never heard of the company. Is it a Chinese only company or does it do shit here in the States?
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.

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:

Stock down 78%.jpg

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

operating income down 96%.jpg

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.

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.
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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.

:rolleyes: :rolleyes: :rolleyes:

:rolleyes: :rolleyes: :rolleyes:
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.
And here we go:

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!
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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!
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