Chinese developers ask bondholders to postpone repayments

A troubled Chinese real estate developer with US$310 billion in debt asks investors of its bonds to postpone repayment

BEIJING – A troubled Chinese real estate developer with US$310 billion in debt is asking investors of its bonds to postpone repayment.

Evergrande, the global real estate industry’s most indebted competitor, said that the bond will mature in January 2023. It did not specify how long it will require investors to postpone repayment.

The company is struggling to comply with stricter official restrictions on borrowing in China’s real estate industry while trying to avoid defaults, which has raised concerns about the financial crisis. Chinese regulators try to assure investors that the impact of any possible default can be controlled.

Evergrande said it has 2.3 trillion yuan (350 billion U.S. dollars) in assets and 2 trillion yuan (310 billion U.S. dollars in debt), but it is trying to sell real estate and other assets fast enough to keep up Payments to bondholders and other creditors.

Beijing seems to be trying to avoid bailing out Evergrande in order to avoid sending these companies away when the ruling Communist Party tries to force them to reduce their debt burden.

Smaller developers have gone bankrupt or defaulted on hundreds of millions of dollars in bonds.

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