China property behemoth finds funds to avert bond payment default for now

China property behemoth finds funds to avert bond payment default for now

Reuters Hong Kong/Shanghai

China Evergrande Group appeared to have averted default with a last-minute bond coupon payment, a source said yesterday, buying it another week to deal with a debt crisis looming over the world’s second-biggest economy.

China’s second-largest property developer sent $83.5mn to a Citibank trustee account on Thursday, the person with knowledge of the matter told Reuters, enabling it to pay interest on a US dollar bond due by October 23.

That spelt relief to investors and regulators worried about fallout around global markets and added to Chinese officials’ reassurances that creditors will be protected.

Still, the world’s most indebted property firm — with more than $300bn in liabilities — will need to make payments on a string of other bonds, with the next major deadline to avoid default on October 29 and little known about its capacity to pay.

Evergrande did not respond to a request for comment.

Citibank declined to comment.

The source was not authorised to speak with media and so declined to be identified. Evergrande’s woes have been snowballing for months and its dwindling resources set against its vast liabilities have wiped out 80% of its value.

Founded in Guangzhou in 1996, the developer epitomised a freewheeling era of