The default by the Evergrande group appears to be the first part of a Chinese real estate domino strangled by debt.
Sinic Holdings warned lenders and investors last week that it will likely not pay off the $ 250 million in offshore bonds due this Monday. So far, the regional press has not reported that such a payment has been made.
On Friday, another Chinese real estate giant, China Properties Group, announced the first round of defaults on a $ 226 million debt that expired on October 15.
Added to this list is Fantasia Holdings, which has had $ 206 million in debt since early October.
The news comes in the same week that Evergrande will officially default on it if it does not pay interest on its US dollar offshore bond maturing in September.
The company has remained silent on coupon payments on four other bond issues that have expired in recent weeks.
Last week, a number of rating agencies were forced to downgrade the ratings of several Chinese real estate companies.
The People’s Bank of China has already warned that real estate companies that have issued debt securities offshore abroad “must fulfill their obligations”, barring any support from the state.
Gov. Yi Gang stressed on Sunday that authorities will prevent Evergrande’s concerns from spreading to other real estate companies.
“The Chinese economy is doing well despite the mismanagement of some companies,” concluded the governor, quoted by Reuters.
Real estate accounts for about a quarter of China’s GDP, according to Moody’s.
