China's real estate sector bonds showed a somewhat strong outlook, with two major Chinese real estate development companies, Sunac China and Kaisa Group, paying coupons for their $27 million 140 thousand bonds.
However, investors focused on paying the possible default of one of the debt-ridden Chinese Evergrande's bonds this week.
The bond market was warmly welcomed by the Chinese central bank's statement Friday and Sunday last week that Evergrande said the spread of debt problems to the banking system was controllable and that the Chinese economy was "in good shape".
EVERGRANDE owes $305 BILLION
Investors are worried that the bankruptcy of Evergrande, China's second largest real estate company, which has a debt of $305 billion and has liquidity problems, will disrupt the functioning of the financial system in China and that the problems will spread to other countries. These bonds will be in default if the company fails to pay their coupon payments within an additional 30 days.
Evergrande must pay one of its overseas bond coupon payments by October 23, with an additional 30-day payment period expiring. Otherwise, the company's March 23, 2022 bond will be officially in default.
As expected, the $246 million bond of Sinic Holdings, a small-scale Chinese real estate company, defaulted yesterday. The company had warned the market about the risk of default a week ago, stating that it did not have sufficient financial resources.
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