US-based Fitch is the first rating agency to place China Evergrande’s non-domestic bonds in “restricted default” after the heavily-indebted property developer failed to make critical interest payments on Monday, reports the Financial Times. The declaration is the most significant moment yet in the developer’s liquidity crisis that has spread to other businesses across the country’s vast real estate sector.
Evergrande, which has liabilities exceeding $300 billion, missed a Monday deadline to repay bond coupons totaling $82.5 million. The group had still not transferred the funds as of Wednesday in New York, according to people familiar with the matter. Fitch stated that the company did not respond to a request for confirmation on the coupon payments, and it was therefore assuming they had not been made.
Neither the company nor the Chinese government has confirmed that Evergrande has defaulted on its debts, though the company said on Friday there was “no guarantee” it could meet its debt repayments as it entered a restructuring process with assistance from local government officials.
Fitch also stated on Thursday that Kaisa, another heavily indebted developer that failed to repay a $400 million bond that matured on Tuesday, was in restricted default. A person familiar with the situation said that Kaisa was close to signing non-disclosure agreements with advisers to investors.