China Evergrande and Kaisa Group Holdings, the two cash-strapped Chinese property developers that have rattled markets, have been declared in default for the first time, inching closer to a massive debt restructuring that has loomed for months over global markets and the world’s second-largest economy.
The two developers were cut to “restricted default” by the Fitch Ratings agency on Thursday due to nonpayment of offshore bond dues, while Kaisa was reported to have started work on restructuring its $12 billion offshore debt.
The downgrades came even as Evergrande and Kaisa have not officially announced the defaults that could result in long debt restructuring processes.
Separately, in a new effort to assure the public the economy can be shielded from the fallout, the Governor of the People’s Bank of China Yi Gang, said financial markets can cope with the risk caused by Evergrande.
The rights of shareholders and creditors of the global real estate industry’s most-indebted company will be “fully respected” based on their legal seniorities, Yi told a financial forum in Hong Kong.
https://www.dailysabah.com/business/economy/massive-restructuring-due-as-evergrande-kaisa-declared-in-default
