China megadeveloper lurches further into crisis

Evergrande should perhaps be rebranded Lessgrande. As it lurches daily from one debt crisis to the next, it is shrinking at a marvelous rate. Bloomie:

  • Total borrowings fell 15% from March to $88bn by cutting land buys, doing fire sales and selling businesses.
  • EGR needs to cut debt to $54bn by 2023 to meet the three red-lines policy.
  • 2025 dollar bonds sank to 67 cent on the dollar and liquidity is clearly fragile.
  • Some home buyers are upset and demanding refunds as EGR discounts itself to deleveraging.

Bloody shaky seems about the right description for that plan. Moreover:

Moody’s has downgraded EGR to B2.

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