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China’s Evergrande set to default on debt payment

Mount Equity Group Tokyo, Japan > News > Markets > China’s Evergrande set to default on debt payment

Tomorrow is looming as crunch day for the beleaguered debt-burdened Chinese property developer Evergrande when interest payments on two bonds fall due.

Evergrande is up for a payment of $83.5 million in interest on an 8.25 percent five-year bond and a $36 million payment on another debt on the same day.

China Evergrande Centre [Wikimedia Commons]

Financial markets have priced in the prospect of payment as unlikely with one of its bonds trading at less than 30 percent of its face value. Whatever the outcome of events tomorrow, the prospect of default will continue to hang over the company as, according to the Financial Times, it has $850 million due in interest payments falling due before the end of the year.

On Monday the Evergrande crisis triggered significant falls on global share markets with Wall Street experiencing its largest one-day fall since May. At one stage the Dow was down by 972 points before paring back some of the losses…

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