Evergrande’s Impending Doomsday: Creditors Demand Immediate Repayment as Evergrande’s Bonds Are No Longer Eligible Collateral
Translated by: MOS-Laniakea
According to a report by Bloomberg last Friday, Evergrande Group has received immediate repayment demands for partial loans from at least two of its largest non-bank creditors who are trust companies. Evergrande has heftily relied on investments from “shadow” trusts for funding that accounted for 40% of the company’s borrowings at the end of 2019.
Based on the data from Yongyi Trust Research, Evergrande has about $7.1 billion of such loans maturing in 2021, but meanwhile, Evergrande’s RMB bonds are no longer eligible as collateral. In the repo market of Shenzhen and Shanghai exchanges, nine Evergrande notes were not on a list of securities accepted to return cash, which cut another major source of funding for Evergrande. Evergrande’s stock has fallen 74% this year, indicating the countdown for the bankruptcy of the Evergrand Group, the “Chinese Lehman Brothers.” has started to tick.