Less than grand: China Evergrande’s effect at home and abroad
As the saying goes, “History doesn’t repeat, it rhymes.” Thirteen years ago, the collapse of Lehman Bros. sent shock waves throughout the global financial system. In late September, those same markets were roiled amid growing concern China Evergrande Group — one of China’s largest property developers — would default on its massive $300 billion in debt, the highest for any publicly traded real estate manager or developer globally, according to S&P Global Market Intelligence.
On Sept. 20, Evergrande stock dropped 10 percent in Hong Kong to HK$2.28 ($0.29) per share, with the stock down 84 percent for the year at that time, below its 2009 IPO price of HK$3.50 ($0.45), reported CNN Business. According to Bloomberg News, Evergrande was supposed to repay interest on some bank loans that day, but Chinese authorities had informed major banks those payments won’t be received. And it is unclear how much of its obligations Evergrande will be able to meet.