Tag: Credit and Debt

I.M.F. Forecasts U.S. and China Slowdowns Will Hold Back Growth

Chin@Strategy

The pandemic has changed the way people in many parts of the world spend their money, shifting funds that might have been used for dining, travel and entertainment to goods they can play with, sit on or consume at home. That increased demand, combined with persistent difficulties in moving goods from one city or continent to another, skyrocketing energy prices and labor shortages, has driven up costs. Some of those pressures are expected to wane toward the end of the year — but not everywhere. “In the United States the…

With Property Sales Plunging, China Evergrande Faces More Protests

Chin@Strategy

Protesters gathered outside China Evergrande offices in Guangzhou on Tuesday to demand that the indebted real estate developer give them their money back, as the company’s sales across China continued to plunge. Evergrande, the world’s most indebted developer, has tried for months to signal to home buyers, employees and investors that its $300 billion debt problem was under control. Just last week, its billionaire founder pledged to restart construction on its many stalled sites. But the challenges keep mounting. On Tuesday, Evergrande said that property sales fell 39 percent last…

China Evergrande Defaults on Its Debt, Fitch Says

Chin@Strategy

HONG KONG — China Evergrande has defaulted on the debt it owes to global investors, one credit rating firm said on Thursday, as questions swirled about how Beijing would fix a debt-laden property company that has come to symbolize the problems plaguing the world’s second-largest economy. The firm, Fitch Ratings, said in a statement that it had placed the Chinese property developer in its “restricted default” category. The category means that China Evergrande had formally defaulted but had not yet entered into any kind of bankruptcy filing, liquidation or other…

China Evergrande Troubles Spread Through Property Sector

Chin@Strategy

When times were flush for the property developer China Fortune Land, it bought a trophy soccer club and recruited star athletes from Argentina. These days, the players with the club, Hebei F.C., are on indefinite leave because it can’t afford to keep the lights on. The developer is one of a growing number facing financial strain in China, challenging the narrative from Beijing that it can keep the country’s corporate debt crisis under control while avoiding the disorderly collapse of its property giants. Global markets just weeks ago were fretting…

Another Chinese real estate developer misses a payment.

Chin@Strategy

A Chinese real estate developer missed a key payment to foreign bondholders this week, heightening the persistent fears of a coming crisis in China’s real estate sector. The developer, Fantasia Holdings Group, a company specializing in luxury properties that was founded by the niece of Zeng Qinghong, a former vice president, said on Monday night that it had failed to make a final payment of $206 million. The disclosure surprised investors already on edge after two missed payments from China Evergrande Group, the world’s most indebted developer. Jittery investors sold…

China Evergrande’s Shares Are Halted as Doubts Swirl

Chin@Strategy

Shares of China Evergrande were halted on Hong Kong’s stock exchange on Monday pending a deal, as doubts swirled over whether the struggling property giant would be able to meet its immense financial obligations. Evergrande said in a filing that its shares were halted ahead of an announcement about a “major transaction.” It gave no additional details. The real estate developer — once China’s most prolific — has been under close watch by foreign investors and local regulators after it missed two important interest payments on U.S. dollar bonds. The…

Evergrande’s Struggles Offer a Glimpse of China’s New Financial Future

Chin@Strategy

HONG KONG — Xu Jiayin was China’s richest man, a symbol of the country’s economic rise who helped transform poverty-stricken villages into urbanized metropolises for the fledgling middle class. As his company, China Evergrande Group, became one of the country’s largest property developers, he amassed the trappings of the elite, with trips to Paris to taste rare French wines, a million-dollar yacht, private jets and access to some of the most powerful people in Beijing. “All I have and all that Evergrande Group has achieved were endowed by the party,…

Who’s Buying Evergrande?

Chin@Strategy

A look inside Robinhood during meme-stock mania The trading app Robinhood has grown explosively, gone public and, for good measure, is now getting into crypto wallets. But internal exchanges between company managers revealed in a new legal filing — featuring Robinhood’s C.E.O., Vlad Tenev — highlight the tensions between fast growth and consumer protection. A class-action lawsuit brought by Robinhood users alleges that the company was negligent during a period of extreme market volatility in late January, knowing it had insufficient capital to handle all the trading by new and…

China Evergrande Warns of Financial Pressure, Hires Advisers

Chin@Strategy

China Evergrande, the troubled property giant that has become a symbol of debt and excess in the world’s second-largest economy, said on Tuesday that it faced “tremendous” financial pressure and had hired restructuring experts to “explore all feasible solutions” for its future. The company’s fate, however, remains unclear, as it struggles in a country where business troubles often attract the direct attention — and the direct meddling — of Beijing. Evergrande’s admission that its finances have taken a sharp turn sent its already battered shares down by 12 percent on…

Why Evergrande’s Debt Problems Threaten China

Chin@Strategy

Every once in a while a company grows so big and messy that governments fear what would happen to the broader economy if it were to fail. In China, Evergrande, a sprawling real estate developer, is that company. Evergrande has the distinction of being the world’s most debt-saddled property developer and has been on life support for months. A steady drumbeat of bad news in the recent weeks has accelerated what many experts warn is inevitable: failure. The ratings agency Fitch said this week that default “appears probable.” Moody’s, another…