(Bloomberg) Evergrande Group avoided default by paying an $83.5 million bond coupon just before the Saturday deadline. The next coupon payment will fall due in one week.
The developer sent the funds on Thursday towards the bond payment, which will fall due on September 23. Investors will reportedly receive their funds on Saturday.
The coupon payment went to the international creditors against the expectation that the developer would prioritize local creditors and the disappointed homebuyers.
Evergrande is still under pressure as the 30-day grace period of another dollar coupon payment expires on October 29.
The developer is obligated to pay other four-dollar notes before the end of 2021. An estimated $7.4 billion in domestic and foreign bonds will be due next year.
The announcement helped fuel a surge in China’s junk bonds amid an anticipated debt restructuring by the firm. Despite the rise, Evergrande’s March 2022 bond closed at just 26 cents.
At the peak of the home-buying season, the developer’s real estate sales dropped 97%, making it harder for it to generate revenue during the debt crisis.
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