The focus this week turns towards troubled Chinese developer Evergrande which has an $83.5mn coupon on its 8.25% 2022s and a RMB 232mn ($36mn) coupon on an onshore bond due on Thursday. Besides, it has another $47.5mn in coupons due next week on September 29 for its 9.5% 2024s. The dollar bond has a 30-day period before a missed payment is considered a default, according to the covenants. Overall, Evergrande has $669mn in coupons due through year-end, of which $615mn is on its dollar bonds. Evergrande is also scheduled to pay interest on bank loans today, with a one-day grace period. While details on the amount due are not publicly available, sources say that Chinese authorities have told lenders not to expect repayment, with the developer and its lenders discussing the possibility of extensions and rolling over some loans.
Sources told Reuters that one of Evergrande’s main lenders has made provisions for losses on a portion of its loans. They said that AgBank has made some loan loss provisions for part of its exposure to Evergrande, while China Minsheng Banking and China CITIC Bank are prepared to roll over some of their near-term debt obligations.
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