Chinese mega-developers begin to crack

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Lordy, already! A few months of three red lines policy and the titans totter. China’s largest property developer, Evergrande, is increasingly on the nose for credit markets:

And equity markets:

  • Regulators have instructed Evergrande counterparties to stress test their exposures.
  • Evergrande denies any wrongdoing in its partly-owned Shengjing Bank Co, as well as heavy discounting for empty apartments.
  • Evergrande has $50bn in debt, 80% of which is due in the next year. Sheesh.
  • $20bn is dollar bonds.
  • It is behind all “three red lines” for develeraging imposed earlier this year.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.