Dhe Chinese housing authority has warned banks of payment defaults at the real estate company Evergrande, according to a media report. Evergrande will not be able to service the interest on loans due on September 20, the Bloomberg news agency reported on Wednesday, citing insiders. The company was in talks with financial institutions this week about a moratorium on interest rates and a possible loan extension.
Investors fear a collapse of the real estate company, which is groaning under a mountain of debt of more than $ 300 billion. There is also concern that bankruptcy will send shock waves through the Chinese banking system. Evergrande shares lost around six percent and fell to their lowest level since 2014. The shares of other real estate groups also got under the wheels.
The announcement of the impending default put the Evergrande bonds under pressure. After a price slide of more than 20 percent, trading in the China Evergrande bond, which runs until May 2023, has been halted on the Shenzen Stock Exchange. The bond, which runs until January 2023, also slipped by around 20 percent, while the price of the bond, which was traded in Shanghai until May 2024, fell by more than 20 percent. The exchange operator has not announced any trading suspensions for these stocks.