- Beijing On Edge: China’s 2nd Largest Property Developer Plummets Amid Fears Of Imminent Liquidity Crisis
by Tyler Durden, https://www.zerohedge.com/
Is China’s housing bubble – the main “wealth effect” for hundreds of millions of middle class Chinese – finally about to burst? On Friday, trading in onshore bonds of China Evergrande, China’s second largest and the world’s most indebted property developer, was halted after reports it was seeking government help to stave off a cash crunch caused the price of its shares and debt to tumble, and sparking a crisis of confidence among creditors who’ve lent the world’s most indebted developer more than $120 billion.
As Bloomberg reports, long-simmering doubts about the property giant’s financial health exploded to the fore on Thursday, following reports it had sent a letter to Chinese officials warning of a potential cash crunch that could pose systemic risks. The news sparked a furious liquidation in the company’s bonds that continued into Friday, sending the price of Evergrande’s yuan note due 2023 down as much as 28% to a record low. Losses in the company’s dollar bonds spread to high-yield debt across Asia.