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25.09.2020

Hong Kong’s Evergrande on the verge of default

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S&P Global cut its outlook on Evergrande's B+ credit rating to negative from stable

Stocks impacted: Evergrande Group (3333)

China Evergrande Group told officials in mainland China that it could default on its debt if a proposed mainland listing is not approved. The company’s bonds were halted on Friday after plunging following warnings about default. The suspensions applied to the company's 6.27% May 2023 and 6.8% May 2024 bonds. The indebted Hong Kong-listed real estate developer could be forced to repay as much as $19.04 billion, about 92% of its cash and equivalents, which could lead to the company defaulting on other borrowings. Earlier this month, Fitch Ratings affirmed the Long-Term Foreign-Currency Issuer Default Ratings of China Evergrande Group and subsidiary Hengda Real Estate Group Co., Ltd at 'B+' with Stable Outlooks. Meanwhile, S&P Global cut its outlook on Evergrande's B+ credit rating to negative from stable on Thursday. Today, Shares of China Evergrande Group dropped as much as 9.5% on market concerns over its cash flow.

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