Positives For Evergrande? Not So Fast

Newswire headlines note that Evergrande Group has transferred 1.75bn non-publicly traded shares in Shengjing Bank, and will receive ~CNY10bn from the transfer.

• We have received some questions re: would we expect this to satisfy immediate bond coupon needs for Evergrande. It is hard to say, the opaque nature of the situation, coupled with reports of non-payment when it comes to equipment purchases, staff wages and interest due to banks, in addition to the shedding of inventory at discounted valuations makes it very hard to get a true handle on the situation within the company.
• Evergrande has a $45.2mn coupon payment due on a US$ denominated offshore bond on Wednesday. A reminder that the company missed a similar payment last week, with both of the bonds benefitting from a 30-day grace period before default can be declared.
• Payments to onshore investment product investors have also been missed.
• BBG have also flagged the maturity of a note issued by Jumbo Fortune Enterprises, due Sunday 3 October, with some holders of the $260mn note suggesting that China Evergrande is a guarantor of the debt, per sources.
• In terms of an ultimate solution, a reminder that the most recent source reports from RTRS suggested that "Beijing is prodding government-owned firms and state-backed property developers such as China Vanke to purchase some of embattled China Evergrande Group's assets."