Fears grow as Evergrande interest deadline passes

China Evergrande has left global investors guessing over whether it will make a key interest payment, adding to fears that Beijing will let overseas bondholders swallow large losses as a liquidity crisis deepens at the world’s most indebted property company.

Evergrande owes $305 bil- lion, has run short of cash and investors are worried a col- lapse could pose systemic risks to China’s financial sys- tem and reverberate around the world.

A Thursday deadline for paying $83.5 million in interest of a dollar bond passed without remark from Evergrande, and bondholders had not been paid nor heard from the company, two people familiar with the situation told Reuters. The firm has a 30-day grace period and will default if that passes without payment.

Evergrande’s silence on the interest payment and another $47.5 million payment due next week contrasts with its treatment of its domestic investors. The company this week resolved one coupon payment on a domestic bond.

“This is part of the tactics of any sovereign driven restructuring process — keeping people in the dark or guessing,” said Karl Clowry, a partner at Addleshaw Goddard in London. “The view from Beijing is offshore bondholders are largely Western institutions and so can justifiably be given different treatment.”

A Thursday deadline for paying $83.5 million in interest of a dollar bond passed without remark from Evergrande

PBOC pumps in $71 billion

The Chinese central bank continued to pump liquidity into the financial system on Friday as policy makers sought to avoid contagion stemming from Evergrande Group spreading to domestic markets. The People’s Bank of China has injected a net 460 billion yuan ($71 billion) of short-term cash into the banking system in the past five working days, including 70 billion yuan on Friday. That’s helping ensure sufficient liquidity throughout the crisis.