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S&P says Beijing unlikely to step in as Evergrande steps closer to default

'We do not expect the government to provide any direct support to Evergrande,' credit analysts from S&P Global Ratings wrote in a report.

9/22/2021 6:59:00 AM

'We do not expect the government to provide any direct support to Evergrande,' credit analysts from S&P Global Ratings wrote in a report.

'We do not expect the government to provide any direct support to Evergrande,' credit analysts from S&P Global Ratings wrote in a report.

After stock markets across the world posted their worst day in months yesterday, financial analysts have scrambled to get an idea on whether a major source of the woe, China's second-largest property developer the Evergrande Group, will be left to fend off its massive debts alone or if it will receive a bailout from the Beijing government. Today, they received some semblance of an answer.

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S&P Global Ratings, one of the top three credit-rating agencies, issued a report today signaling that the property developer will likely be forced to find its own way to make payments on its $89 billion worth of loans or file bankruptcy."We do not expect the government to provide any direct support to Evergrande,"

S&P credit analysts wrotein its Monday report."We believe Beijing would only be compelled to step in if there is a far-reaching contagion causing multiple major developers to fail and posing systemic risks to the economy."S&P followed this up with a signal that Beijing likely won't face pressure to provide Evergrande with this relief, writing,"Evergrande failing alone would unlikely result in such a scenario." headtopics.com

The Evergrande headquarters is seen in Shenzhen, southeastern China on September 14, 2021, as the Chinese property giant said it is facing"unprecedented difficulties." Some say its failure could be imminent.Photo by NOEL CELIS/AFP via Getty Images

Evergrande ranks as the world's most indebted property developer. Its $89 billion worth of loans and bonds stand as just part of a larger $300 billion package worth of debt that it has incurred over years of heavy borrowing as it looked for years to expand its interests alongside China's growing economy. This Thursday, it faces its greatest challenge yet, as it begins payment on the $83 million in interest attached to a March 2022 bond.

On Tuesday, shares of Evergrande in Hong Kong fell by 4 percent, sinking the stock to 33 cents a share—its lowest value seen in the last ten years. The company's billionaire chairman and founder tried to rally company morale byto employees that the firm would"walk out of its darkest moment." His plan on how he expects to do so remains to be seen.

Read more: Newsweek »

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S&P Global says default by China Evergrande could test government's capacity to backstop 'potentially substantial failures'S&P Global Ratings said Monday a default by Chinese property developer China Evergrande Group will neither lead to a tidal wave of defaults nor mere ripples... good luck

S&P does not expect Beijing to provide any direct support to embattled EvergrandeS&P Global Ratings said it does not expect Beijing to provide any direct support to embattled China Evergrande Group , amid growing investor fears the property giant could default on its debt mountain as two repayment deadlines loomed. good

China Evergrande shares plummet to 11-year low on default risksShares of Evergrande on Monday plunged as much as 19% to their lowest in over 11 years, extending losses as investors take a dim view of its business prospects with a fast approaching deadline for payment obligations this week. Instead of catching profitable tech companies, they need to catch rogue directors.

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Dollar holds gains, yuan under pressure as Evergrande risks growThe offshore yuan wallowed near an almost one-month low on Tuesday while the safe-haven dollar and yen stood tall as investors sought shelter from a potential China Evergrande default. I wonder what will happen to the price of cryptos that are based on the dollar. For example $Dai coin.

How the Chinese Evergrande crisis affects global marketsThe fear of possible defaulting of Chinese real estate giant Evergrande has caused broad sell-off in global financial markets, even causing a dip in crypto currencies.