Chinese property giant Evergrande has reportedly deterred default for the second time this month by making an overdue interest payment to offshore bondholders almost two weeks prior to the expiration of its grace period.

As per reports from global media, Evergrande made a critical payment on Thursday, as international bondholders of a 9.5% dollar note reported that they had been paid.

The crisis at one of China’s biggest property developers has dampened investor sentiment, hammered the real estate market, and triggered fears of a rollover into the broader economy.

The firm has been reported to have missed a number of offshore bond payments.  Even though Evergrande had a 30-day grace period on some of the missed payments, the general expectation had been that the property developer will fail to meet its obligations.

Evergrande’s woes have mounted for months and its deteriorating resources against its huge liabilities have demolished 80% of its value.

The recent news of its payment will soothe fears over the property developer’s future, following the company’s announcement on Monday that the firm had resumed work on over 10 of its projects in 6 locations.

Relaxing credit controls

Earlier last week it had been reported that the developer had wired $83.5 million for the purpose of an overseas payment first due on September 23.

According to reports, Chinese authorities have also asked the founder of Evergrande Xu Jiayin, who was China’s richest man at one point, to use his personal fortune to improve the company’s debt crisis.

Analysts are still wary and caution that the fundamentals of the firm remain shaky, as it still has multiple other dollar bond payments to navigate before the end of the year.

Evergrande plummeted into a financial crisis after Chinese authorities began clamping down on the country’s gigantic property sector in a move to rein in excessive debt. According to some estimates, the country’s real estate sector accounts for a quarter of the economy.

China presently appears to be rolling back a few of those regulations, but according to reports on Friday the local banks had started easing some credit controls on homebuyers and developers in adherence to orders from the central bank.

The story was filed by the News Desk.
The Desk can be reached at info@thecorrespondent.com.pk.

The story was filed by the News Desk. The Desk can be reached at info@thecorrespondent.com.pk.

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