Distressed Chinese property developer Evergrande filed for Chapter 15 bankruptcy in New York on Thursday. This follows a default by the company, the world’s most indebted developer, in late 2021. Evergrande’s default sparked a much larger crisis across the broader Chinese property sector, which has now spread to Country Garden (COGARD), the largest developer by sales. Just yesterday, COGARD warned of major uncertainties in meeting upcoming local bond redemptions. Its dollar bonds are now trading at a deeply distressed level of 7 cents on the dollar. For comparison, Evergrande’s dollar bonds are trading at 4-5 cents on the dollar.
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