The credit rating agency S&P Global Ratings has declared in “selective default” to the Chinese developer Evergrande Group and its financial subsidiary Tianji Holding after they have not made the coupon payments of their senior notes in dollars and once the periods have expired. corresponding grace.
In this way, the Chinese real estate giant has already been declared in default by two of the main credit rating agencies, after Fitch Ratings downgraded the rating of Evergrande to a situation of “restricted default” (RD) on December 9, as well as that of its subsidiaries, Hengda Real Estate Group and Tianji Holding.
S&P Global explained that it has made this decision after evaluating that the companies did not comply with the payment of the coupons once the corresponding grace periods to make them have passed.
Specifically, on October 31, coupons expired on October 31, 2021 for 14 million dollars in private placement bonds issued by Evergrande, and on November 6 for the 83 million US dollars bonds guaranteed by Tianji with maturity in 2022 and 2023.
The 2022 US dollar private bonds were issued by Evergrande on April 30, 2019, while the 2022 and 2023 dollar bonds were issued in November 2018 by a Tianji special purpose vehicle and are guaranteed by this affiliate.
“Evergrande, Tianji, or the trustee have not made any announcements or confirmation on the status of coupon payments. However, widespread reports in the media point to non-payment of Tianji coupons, and we believe that these reports they are compelling, “the agency explained.
“In addition, we believe that Evergrande has also defaulted on the 2022 dollar private bond coupon because the payment is due at approximately the same time. We do not believe that it will be possible for the group to make the payment of that coupon if it is unable to make the payment of Tianji bonds, “he added.
Likewise, S&P Global has indicated that, at the request of the Chinese company, it withdraws all its ratings from Evergrande and its subsidiaries Hengda and Tianji.
Evergrande acknowledged at the beginning of the month that there are no guarantees that it will have the necessary funds to meet its financial obligations. “In light of the group’s current liquidity status, there is no guarantee that it has sufficient funds to continue to fulfill its financial obligations,” the company admitted in a statement.
Since last September, the Chinese company has been reviewing its capital structure and liquidity position with the help of its financial and legal advisers, evaluating all available strategic options, and maintaining a permanent dialogue with its creditors.
In this sense, the company indicated that it is adopting a comprehensive vision when evaluating its financial situation, considering the interests of all interested parties, respecting the principles of equity and legality, and announced that it plans to actively engage with extraterritorial creditors to “formulate a viable restructuring plan for the company’s offshore debt for the benefit of all stakeholders. “