Trading Concept
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
No Result
View All Result
Trading Concept
No Result
View All Result
Home Trading News

Evergrande default is highly likely, S&P says

by
November 18, 2021
in Trading News
0
0
SHARES
0
VIEWS
Share on FacebookShare on Twitter

RELATED POSTS

Berenberg downgrades FedEx, cuts price target on rising inflation risks

JPMorgan says investors are too worried about Apple, sees 40% rebound before year-end

The logo of China Evergrande is seen at outside China Evergrande Centre building in Hong Kong, China September 23, 2021.

Tyrone Siu | Reuters

BEIJING — Highly indebted property developer China Evergrande will likely default because the company has essentially lost its main business, S&P Global Ratings analysts said in a report Thursday.

Evergrande was China’s second-largest developer by sales last year. Like many Chinese developers, the company sold apartments to consumers before completion, helping to generate capital for future projects.

But that cash flow cycle is running into problems. Despite the company’s ability to sell assets and find ways to make payments in time, “Evergrande’s massive debt will catch up with it,” the S&P report said.

“The firm has lost the capacity to sell new homes, which means its main business model is effectively defunct. This makes full repayment of its debts unlikely,” the analysts said.

“We still believe an Evergrande default is highly likely,” the report said.

Evergrande did not immediately respond to a CNBC request for comment on the S&P report.

While the developer has managed to stave off default with last-minute payments, the analysts said Evergrande’s bigger test will be when $3.5 billion comes due for U.S. dollar-denominated notes in March and April next year.

Over the last decade, the value of Evergrande’s properties under construction rose so quickly that it far exceeded the value of the company’s completed projects as well as what the company was able to sell. The People’s Bank of China has called Evergrande a unique case, and in October said most real estate developers were stable.

“We believe the government wants to unwind Evergrande in a controlled fashion, or let an orderly debt restructuring take place,” the S&P analysts said Thursday.

“Authorities want to maximize the number of presold homes Evergrande completes to protect the interests of homebuyers, and for it to largely repay the contractors and other small businesses that support the firm.”

The real estate company has previously warned investors of default.

The developer’s Hong Kong-listed shares fell more than 5% Thursday despite news it reached a deal to raise $273 million in an asset sale.

ShareTweetPin

Related Posts

Berenberg downgrades FedEx, cuts price target on rising inflation risks

by
July 1, 2022
0

Shares of FedEx are a "show me story" until the company can prove it can deliver on their turn-around strategy,...

JPMorgan says investors are too worried about Apple, sees 40% rebound before year-end

by
July 1, 2022
0

Apple may be dealing with lower consumer demand and growing FX challenges, but JPMorgan is "not as worried" about the...

The Dow just booked its worst first half since 1962. What history says about the path ahead.

by
July 1, 2022
0

This bear has claws. A bear market that began on the first trading day of 2022 drove down the S&P...

Apple Ex-Corporate Law Chief Admits Years of Insider Trading

by
July 1, 2022
0

TipRanks Future Winners? 3 Stock Giants Jim Cramer Bets On If there’s one common theme connecting the market’s experts, it’s...

JetBlue extends tender offer date for Spirit Airlines to July 29

by
July 1, 2022
0

A photo of a Spirit Airlines jet coming in for a landing in Las Vegas on 25 May 2020. JetBlue...

Next Post

Best Mutual Funds That Repeatedly Top The Market

Stocks making the biggest moves premarket: Alibaba, JD.com, Cisco, Nvidia and more

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

email

Get the daily email about stock.

Please Enter Your Email Address:



By opting in you agree to our Privacy Policy. You also agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

MOST VIEWED

  • Forget Tesla — this auto stock is the one to buy right now, analyst says

    0 shares
    Share 0 Tweet 0
  • WHO says Covid vaccine booster programs will prolong pandemic

    0 shares
    Share 0 Tweet 0
  • Spin or Split? AT&T Has a Big Decision to Make on Discovery Stake.

    0 shares
    Share 0 Tweet 0
  • Here’s how Carl Icahn is positioning for a possible recession in America

    0 shares
    Share 0 Tweet 0
  • Some lawmakers and their families are betting thousands of dollars on crypto

    0 shares
    Share 0 Tweet 0
  • Home
  • Trading News
  • Email Whitelisting
  • Privacy Policy
All rights reserved by tradingconcept.net
No Result
View All Result
  • Email Whitelisting
  • Home
  • Privacy Policy

All rights reserved by www.tradingconcept.net