{"id":50049,"date":"2021-09-23T17:20:14","date_gmt":"2021-09-23T14:20:14","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=50049"},"modified":"2025-09-02T15:53:35","modified_gmt":"2025-09-02T12:53:35","slug":"evergrande-pays-up-on-september-22-but-authorities-warn-of-a-potential-storm","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/evergrande-pays-up-on-september-22-but-authorities-warn-of-a-potential-storm\/","title":{"rendered":"Evergrande pays up on September 22, but authorities warn of a potential &#8216;storm&#8217;"},"content":{"rendered":"<p>The Chinese developer Evergrande Group, on the brink of collapse, whose on-balance-sheet debt is estimated at about 2% of China&#8217;s GDP, paid interest on bonds to local investors. Beijing has urged local authorities to prepare for a potential &#8216;storm&#8217;, according to <a href=\"https:\/\/www.wsj.com\/articles\/china-makes-preparations-for-evergrandes-demise-11632391852\">Wall Street Journal<\/a>.<\/p>\n<p>On September 22, the company <a href=\"https:\/\/www.wsj.com\/articles\/china-evergrande-onshore-unit-will-pay-bond-interest-on-time-11632287495?mod=article_inline\">agreed<\/a> to pay 232 million yuan ($35.9 million) on four-billion-yuan bonds maturing in September 2025.<\/p>\n<p>The situation with the $2 billion issue maturing in March 2022, for which the company is due to transfer $83.5 million to investors on September 23, remains unclear as of this writing. Earlier the company <a href=\"https:\/\/www.reuters.com\/world\/china\/china-evergrande-unit-make-359-mln-onshore-coupon-payment-sept-23-2021-09-22\/\">promised<\/a> to do so.<\/p>\n<p>Next week the company faces another interest payment on bonds totaling $47.5 million.<\/p>\n<p>The issuer has 30 days to repay the debt to investors to avoid a technical default.<\/p>\n<p>Sources for the publication said local authorities were instructed to prepare to prevent any unrest and to mitigate problems for home buyers and Evergrande employees.\u00a0<\/p>\n<p>They should assemble working groups of lawyers and auditors to obtain a full picture of the developer&#8217;s financial position, transfer unfinished properties to competitors, and strengthen monitoring of public sentiment.<\/p>\n<p>According to <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-09-21\/evergrande-is-likely-to-default-without-direct-support-s-p-says\">Bloomberg<\/a>, by the end of 2021 Evergrande will need to pay $669 million in coupons and will have to meet $7.4 billion in obligations in 2022. The company\u2019s equity stands at about $3.9 billion with debt near $300 billion.<\/p>\n<p>Earlier the company breached three red lines set by the authorities for developers:<\/p>\n<ul class=\"wp-block-list\">\n<li>Debt-to-asset ratio, excluding advances, at 70%;<\/li>\n<li>Net debt to equity ratio at 100%;<\/li>\n<li>Liquidity to short-term debt at 1:1.<\/li>\n<\/ul>\n<p>On September 23, Bloomberg <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2021-09-23\/evergrande-s-ev-unit-has-stopped-paying-staff-factory-suppliers\">reported<\/a> that Evergrande Group&#8217;s EV unit failed to pay salaries to some workers and did not pay some suppliers for factory equipment on time.<\/p>\n<p>Sources from Asia Markets said the CCP is developing a plan to restructure the company into three separate legal entities within the coming days.<\/p>\n<p>On September 23, it emerged that Chinese Estates (Holdings), Evergrande&#8217;s largest shareholder, plans to fully sell its 5.7% stake in the company. The investor is prepared to book a loss of about $1 billion.<\/p>\n<p>The day before, Federal Reserve Chair Jerome Powell, during a press conference following the meeting, said that American corporations do not face a significant risk from Evergrande. But the situation could affect investor confidence in certain sectors, he added.<\/p>\n<p><a href=\"https:\/\/www.ft.com\/content\/7ac2d661-5a63-4768-91a1-182f02b2afa5\">Financial Times<\/a> recorded a rising perception of risk among investors in Asia&#8217;s junk-rated bonds. Economists have begun lowering forecasts for China\u2019s GDP growth in Q4. The central bank of the country, for a second consecutive day, is pumping billions of yuan into the financial system via reverse-repo operations.<\/p>\n<p>Against the backdrop of news around Evergrande and <a href=\"https:\/\/forklog.com\/en\/news\/fed-officials-flag-a-modest-rate-hike-path-as-cryptocurrencies-reclaim-tuesdays-highs\">the recent Fed meeting<\/a>, bitcoin and Ethereum prices are consolidating near the highs reached yesterday, maintaining yesterday&#8217;s resilience. Polkadot has extended its positive momentum.<\/p>\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"483\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/1-553-1024x483.png\" alt=\"Evergrande pays up on September 22, but authorities warn of a potential 'storm'\" class=\"wp-image-150493\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/1-553-1024x483.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/1-553-300x141.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/1-553-768x362.png 768w, https:\/\/forklog.com\/wp-content\/uploads\/1-553.png 1237w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>Data: <a href=\"https:\/\/www.coingecko.com\/en\">CoinGecko<\/a>.<\/figcaption><\/figure>\n<\/div>\n<p>The founder of Galaxy Digital, Mike Novogratz <a href=\"https:\/\/forklog.com\/en\/news\/mike-novogratz-identifies-key-price-levels-for-bitcoin-and-ethereum\">expressed confidence<\/a> about the near-term prospects of the digital-asset market, as long as bitcoin does not fall below $40,000 and Ethereum below $2,800.<\/p>\n<p>On Tuesday, bitcoin prices briefly breached the level he flagged. Ethereum also slipped below $2,800. After the Fed meeting they remained above those levels.<\/p>\n<p>Subscribe to ForkLog news on Telegram: <a href=\"https:\/\/t.me\/forklogfeed\" target=\"_blank\" rel=\"nofollow noopener\">ForkLog Feed<\/a> \u2014 the full news feed, <a href=\"https:\/\/telegram.me\/forklog\" target=\"_blank\" rel=\"nofollow noopener\">ForkLog<\/a> \u2014 the most important news, infographics and opinions<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The on-balance-sheet debt of Evergrande Group, which is on the brink of collapse and is estimated at about 2% of China\u2019s GDP, paid interest on bonds to local investors. Beijing has urged local authorities to prepare for a potential &#8216;storm&#8217;, according to the Wall Street Journal.<\/p>\n","protected":false},"author":1,"featured_media":50050,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1431,133,2245,1249,1224],"class_list":["post-50049","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-bonds","tag-china","tag-evergrande","tag-federal-reserve-system","tag-macroeconomics"],"aioseo_notices":[],"amp_enabled":true,"views":"14","promo_type":"1","layout_type":"1","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/50049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=50049"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/50049\/revisions"}],"predecessor-version":[{"id":50051,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/50049\/revisions\/50051"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/50050"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=50049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=50049"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=50049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}