Closely Watched Deadline in China Passes in Silence

Investors in limbo as Evergrande does not make payment
By John Johnson,  Newser Staff
Posted Sep 24, 2021 8:40 AM CDT
Closely Watched Deadline in China Passes in Silence
A police officer and security guards stand on duty outside the headquarters for Evergrande in Shenzhen in southern China, Thursday, Sept. 23, 2021.   (AP Photo/Ng Han Guan)

The world's financial markets waited anxiously all day Thursday to see what the teetering Chinese behemoth Evergrande would do as a big bond payment came due. Aaaand ... crickets. The real estate conglomerate on the brink of default made no public statements, and, more crucially, apparently did not make the $83 billion payment or communicate with the bondholders, sources tell Reuters. The silence has extended into Friday, notes CNBC, and both outlets describe investors as being in a state of limbo. However, the company actually has some breathing room because it will not technically default on the payment for 30 days.

"It is clear now that Evergrande will make use of the 30-day grace period, to see if there is any further development or instructions from the government," Jackson Chan of research portal Bondsupermart tells Reuters. The stakes are high, as evidenced by how the first news of the company's trouble tanked world markets on Monday. The Wall Street Journal reports the Chinese government is telling officials in localities where Evergrande has developments (pretty much everywhere) to prepare for the company's failure. That suggests Beijing is unwilling to bail out Evergrande, though a consensus seems to be emerging on Wall Street that China will be able to contain the damage should Evergrande indeed go bust. (More Evergrande stories.)

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