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Evergrande misses offshore payment again

Investors remain concerned over lack of communication and potential losses

Evergrande has missed paying a bond interest payment again according to two bondholders.

It is the second time the property developer has missed its offshore debt obligations in seven days.

However, the firm did make a partial payment to some of its onshore investors.

The firm, facing the pressure of its more than $300bn debt, was obligated to pay $47.5m in a bond interest payment.

The total amount of the liabilities are the same as 2% of China‘s GDP, as concerns remain over the fallout and its potential impact on the world financial system.

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Investors are concerned by Evergrande’s lack of communication as they face the potential of having to take big losses.

“I can’t see there being much willingness to give a fairer outcome to offshore bondholders rather than onshore banks, let alone house buyers and people who have lent onshore through the personal loan structures,” said Alexander Aitken, a partner at Herbert Smith Freehills in Hong Kong.

“Of course legally there is also structural subordination from being offshore, which means lenders to Evergrande’s onshore subsidiaries get paid before lenders to the parent company or any offshore debt issuer.”

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