Global investors who own China Evergrande Group’s
U.S. dollar bonds were in the dark Thursday about whether the property giant would make a key interest payment, a major test of the highly indebted developer’s ability to avoid a default.
Evergrande was on the hook to make $83.5 million in coupon payments on Sept. 23 on dollar bonds with a face value of $2.03 billion. As of late afternoon in New York on Thursday, bondholders hadn’t received the money, according to people familiar with the matter.
The company could make the payments belatedly and it has a 30-day grace period before bondholders can call a default. A missed payment would set the stage for what could be the largest-ever dollar bond default by a company in Asia.
Thursday’s payment deadline became a focal point for global investors after Evergrande’s liquidity worsened dramatically over the summer, leading to construction halts at some of its unfinished apartment complexes and sharp sales declines. As recently as June, the company had emphasized that it had never missed a bond payment since its founding in 1996.