3Yr·

🏚️ Evergrande misses deadline for about $82 million in interest on USD bonds. This was reported by Reuters this morning. If the interest is not paid within the next 30 days, the bonds will default.

🇨🇳 A domestic bond last week could still be serviced. This strengthens the assumption that the focus for Evergrande and also the Chinese government is on servicing domestic creditors, while creditors of the USD bonds and also shareholders from abroad (the Evergrande share is a VIE in the Caymans) may have to accept heavy losses.

😅 I am curious, but continue to invest diligently without changing anything in my strategy. Or what do you guys think? Should there be some kind of reaction here?

For those who want to read again: https://www.reuters.com/world/china/china-evergrande-bondholders-limbo-over-debt-resolution-2021-09-24/

11 Comments

Ralf L.@Invest-Fuzzi

3Yr

...there is always something. But this is mainly a (further) Chinese problem. Foreign investors are affected with about 2% (if I remember correctly). So this should not be a reason for panic...

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Moritz@leveragegrinding

3Yr

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Ralf L.@Invest-Fuzzi

3Yr

@leveragegrinding well, the sacrifice of this heavyweight figure is perhaps even intentional, as it gives them a (domestic political/ideological) tactical advantage. The strategy behind this could also be a planned takeover (rescue) by the state. Nevertheless, it is a Chinese game for now.
I don't think this game will have any great effect on other players. They have probably already analyzed the position and adapted their strategy (i.e. already priced in the possible bankruptcy).
I tried to stick with the somewhat limping chess comparison... 😁

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Nicolas Professioneller Rolls Royce Großaktionär Coole Leute: @leveragegrinding, @SharkAce und @Lorena(aber die ist nen bisschen schüchtern)@getquinfuermerchverkauft

3Yr

I continue to invest merrily :D

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3Yr

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Alphalex✖@StoneCo

3Yr

and @oliverplass unemployed

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Benjamin Schliebener@InvestierenmitBen

3Yr

@Eochaid That wasn't bashing at all :D Then I was unclear. This was not only suspected before because of China, but also because in the past in such cases the rescue operations and servicing of creditors were also aimed at the domestic market (as you mentioned, e.g. in America with Lehman) - should rather serve as a sober fact that USD bonds and the share itself are more likely to default than domestic bonds 🤗

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