Asian investors soothed by Evergrande bond plan

let it crash

Creative destruction, let the zombie firms die. We will see how China reacts to the far larger interest payment due to external bond holders on Thursday. The internal one was only $35.9 million while Thursday’s is $83.5 million. They have a 30 day grace period before it is deemed in default.

I can see China propping up the firm and ensuring minimal damage to Chinese shareholders and bond holders while throwing the overseas bond holders under the bus.

It seems more ponds are coming in the future. This time seems okay but wonder what if such biggest ponds could not be done next time. It is only matter of time Evergrande go bankrupt sooner or later.

I can see China propping up the firm and ensuring minimal damage to Chinese shareholders and bond holders while throwing the overseas bond holders under the bus.

Very little of their debt is held overseas. China will perhaps find ways to protect those who bought and pre-paid incomplete homes, builders, suppliers and some small investors but expect the CCP to let the big investors to take a haircut. They may also facilitate the bankruptcy and debt restructuring of the company.