By Clare Jim and Samuel Shen
HONG KONG/SHANGHAI (Reuters) – The China Evergrande Group paid an onshore bond coupon due on Tuesday, said four people with knowledge of the matter, amid concerns over a possible offshore default by the developer at the end From this week.
Hengda Real Estate Group Co, the flagship unit of Evergrande, remitted funds to pay an onshore bond coupon of 121.8 million yuan ($19 million), the sources said.
One of the sources said Evergrande, China’s second-largest developer, needs to prioritize the domestic market in the use of its limited cash, as internally the burden on the financial system is much greater.
Evergrande’s liquidity crisis, which has $300 billion in debt and has failed to honor a string of bond payments, has shaken global markets. High-yield bonds issued by Chinese property developers were particularly hit.
An Evergrande bond maturing on March 23, 2022 will officially default if the company fails to pay after a 30-day grace period resulting from nonpayment of a coupon due on September 23.
Sunac China, which has a payment of $27.14 million on Tuesday, has paid its bondholders, a source with direct knowledge of the matter said.
The source was not authorized to speak to the media and declined to be identified. A Sunac representative declined to comment.
The Kaisa Group said on Monday that it has paid a coupon maturing on Oct. 16 and plans to transfer funds to a coupon worth $35.85 million maturing Oct. 22 on Thursday.
On Monday, developer Sinic Holdings defaulted on a $246 million bond payment, as expected. The company had warned of default last week, saying it did not have sufficient financial resources.
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