Three Red Lines is turning into a bloodbath for China’s formerly largest developer, Evergrande. Yesterday:
- 2025 bond fell to nearly half its value.
- Equity is now less than 10% of enterprise value, down 12% in the past week.
- It has emerged that the charming firm has been drawing down upon funds held in escrow from apartment buyers. Funds that are supposed to be retained for the build lest the developer gets in trouble.
- The Chinese city of Shaoyang has halted sales at two of Evergrande’s residential projects in response.
The bloodbath is deep across the sector: